Pricing low is not a dominant strategy for both Snapface and Instashot.
A dominant strategy is one that is the best choice for a player, regardless of the choice made by the other player. In this case, let's examine the possible strategies:
1. If Instashot prices high, Snapface's best response is to price low (18 is better than 11).
2. If Instashot prices low, Snapface's best response is again to price low (10 is better than 2).
Therefore, Snapface's dominant strategy is to price low.
Similarly:
1. If Snapface prices high, Instashot's best response is to price low (11 is better than 2).
2. If Snapface prices low, Instashot's best response is to price low (11 is better than 10).
Therefore, Instashot's dominant strategy is also to price low.
Since both firms have a dominant strategy of pricing low, it is not a dominant strategy for both Snapface and Instashot; rather, it is the dominant strategy for each individual firm.
The complete question is:
Suppose that Snapface and Instashot are the only two firms in a hypothetical market that produce and sell polaroid cameras. The following payoff matrix gives profit scenarios for each company (in millions of dollars), depending on whether it chooses to set a high or low price for cameras. Instashot Pricing High Low High 11, 11 2, 18 Snapface Pricing Low 18, 2 10, 10
Considering all of the information given, pricing low ______ (is / is not)a dominant strategy for both snapface and instashot.