Apple and Samsung have two pricing strategies: Set a high (monopoly) price or se

Question

Apple and Samsung have two pricing strategies: Set a high (monopoly) price or set a low (competitive) price. Suppose that if they both set a competitive price, economic profit for both is zero. If both set a monopoly price, apple makes an economic profit of $100 million and Samsung of $200 million. If Apple sets a low price and Samsung a high price, Apple makes an economic profit of $100 million; if Apple sets a high price and Samsung sets a low price, Apple incurs an economic loss of $50 million and Samsung makes an economic profit of $250 million. Create the payoff matrix for this game by entering the eight economic profit values on the right.

Explanation / Answer

                                         Apple Samsung High Low High (200, 100) (-100, 200) Low (250, -50) (0, 0)

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