Question

Consider a market with two​ firms, Kellogg and​ Post, that sell breakfast cereals. Both companies must choose whether to charge a high price ​($​) or a low price ​($​) for their cereals. These price​ strategies, with corresponding​ profits, are depicted in the payoff matrix to the right.​ Kellogg's profits are in red and​ Post's are in blue. What is the cooperative equilibrium for this​ game?

Answer 1

Both the two companies to choose a price of $4.50

Step-by-step explanation:

Based on the information given we were told that the two companies have to choose whether they will charge either a price that is high or a price that is low for their cereals which means that the two companies COOPERATIVE EQUILILBRIUM for this game is that both the two companies have to choose a price of the amount of $4.50 which represent the high price.