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Using a payoff matrix to determine the equilibrium outcome Suppose there are only two firms that sell Blu-ray players, Movietonia and Videotech

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Using a payoff matrix to determine the equilibrium outcome Suppose there are only two firms that sell Blu-ray players, Movietonia and Videotech. The following payoff matrix shows the profit (in millions of dollars) each company will eam, depending on whether it sets a high or low price for its players. Videotech Pricing High Low 11.11 2.18 High Movietonia Pricing Low 18,2 10,10 For example, the lower left cell shows that if Movietonia prices low and Videotech prices high, Movietonia will earn a profit of $18 million and Videotech will earn a profit of $2 million. Assume this is a simultaneous game and that Movietonia and Videotech are both profit-maximizing firms. If Movietonia prices high, Videotech will make more profit if it chooses a profit if it chooses a price, price, and if Movietonia prices low, Videotech will make more 1f Videotech prices high Movietonia will make more profit if it chooses a profit if it chooses a price price, and if Videotech prices low, Movietonia will make more