A firm, 'Innovate Inc.', is deciding whether to set a high or low price for its product. Its only competitor is 'Future Corp.'. The table below shows Innovate Inc.'s potential profits based on the pricing decisions of both companies. However, one profit outcome is currently unknown and is represented by 'X'.
| If Future Corp. Prices High | If Future Corp. Prices Low | |
|---|---|---|
| Innovate Inc. Prices High | $50,000 | X |
| Innovate Inc. Prices Low | $60,000 | $20,000 |
Innovate Inc.'s analysts have concluded that it is very likely Future Corp. will set a Low Price. Based on this assumption, they recommend that Innovate Inc. should set a High Price to maximize profit. For this recommendation to be correct, what must be true about the value of 'X'?
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A firm, 'Innovate Inc.', is deciding whether to set a high or low price for its product. Its only competitor is 'Future Corp.'. The table below shows Innovate Inc.'s potential profits based on the pricing decisions of both companies. However, one profit outcome is currently unknown and is represented by 'X'.
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