For example, the lower$-$left cell shows that if Flashfry prices low and Warmbreeze prices high, Flashfry will earn a profit of $$18$ million, and

Warmbreeze will earn a profit of $$2$ million. Assume this is a simultaneous game and that Flashfry and Warmbreeze are both profit$-$maximizing firms.

If Flashfry prices high, Warmbreeze will make more profit if it chooses a

price, and if Flashfry prices low, Warmbreeze will make more profit if it

chooses a price.

If Warmbreeze prices high, Flashfry will make more profit if it chooses a

price, and if Warmbreeze prices low, Flashfry will make more profit if it

chooses a price.

Considering all of the information given, pricing low

a dominant strategy for both Flashfry and Warmbreeze.

If the firms do not collude, what strategies will they end up choosing?

Flashfry will choose a low price, and Warmbreeze will choose a high price.

Both Flashfry and Warmbreeze will choose a high price.

Both Flashfry and Warmbreeze will choose a low price.

Flashfry will choose a high price, and Warmbreeze will choose a low price.

True or False: The game between Flashfry and Warmbreeze is not an example of the prisoners' dilemma.

True

False