Matt and Lin are both math tutors. They know that if they collude and set a high price, both will earn a profit of 100; whereas if they both set a low price, both will earn a profit of 50. If one person sets a high price and the other person sets a low price, the person who sets a low price price gets a profit of 125 and the one with a high price gets a profit of 0. Fill in the payoffs in the normal-form game below where Lin is player 1 (represented by rows) and Matt is player 2 (represented by columns). Matt High Low Lin High Low

Matt and Lin are both math tutors. They know that if they collude and set a high price, both will earn a profit of 100; whereas if they both set a low price, both will earn a profit of 50. If one person sets a high price and the other person sets a low price, the person who sets a low price price gets a profit of 125 and the one with a high price gets a profit of 0. Fill in the payoffs in the normal-form game below where Lin is player 1 (represented by rows) and Matt is player 2 (represented by columns). Matt High Low Lin High Low

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter14: Monopolistic Competition And Product Differentiation

Section: Chapter Questions

Problem 7P

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What is predatory pricing?