Two companies, Firm X and Firm Y, are the only producers in a market for a new component. They can each choose to manufacture either a 'Red' version or a 'Blue' version of the component. The table below shows the potential profits for each firm (in millions of dollars) based on their choices. The profits are listed as (Firm X's Profit, Firm Y's Profit).
- If both produce Red: ($5, $5)
- If both produce Blue: ($5, $5)
- If Firm X produces Red and Firm Y produces Blue: ($12, $10)
- If Firm X prod
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Two companies, Firm X and Firm Y, are the only producers in a market for a new component. They can each choose to manufacture either a 'Red' version or a 'Blue' version of the component. The table below shows the potential profits for each firm (in millions of dollars) based on their choices. The profits are listed as (Firm X's Profit, Firm Y's Profit).
- If both produce Red: ($5, $5)
- If both produce Blue: ($5, $5)
- If Firm X produces Red and Firm Y produces Blue: ($12, $10)
- If Firm X prod
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