Answer:
Joint profits are maximized when Carnival picks $260 and Royal Caribbean picks $260.
Step-by-step explanation:
Royal Caribbean
high price low price
$9,000 / $14,720 /
high price $9,000 $1,620
Carnival
low price $1,620 / $8,320 /
$14,720 $8,320
Carnival's dominant strategy is to charge a low price ($260) because it yields the highest profits = $14,720 + $8,320 = $23,040.
Royal Caribbean's dominant strategy is to charge a low price ($260) because it yields the highest profits = $14,720 + $8,320 = $23,040.
Since both companies have the same dominant strategy, a Nash equilibrium exists when they both charge a low price ($260).