Question: Please answer all parts. Short answer A Scenario: Consider a small town which has two hardware stores, Dan's DIY and Tom's Tool Shed. The store

Please answer all parts.

Please answer all parts. Short answer A Scenario: Consider a small town

Short answer A Scenario: Consider a small town which has two hardware stores, Dan's DIY and Tom's Tool Shed. The store owners are considering whether to raise prices on their goods or sell them at the current price. If they both raise their prices, they each earn a profit of $900 per day. If they each continue selling at the regular price, they each earn a profit of $600 per day. If one sets a high price and one sets a regular price, the store that sets the high price earns $400 in profit and the store that keeps the regular price earns $1,000 in profit. Using the matrix below, fill in the profits that match each letter below. A B C D G and H Is the dominant strategy for Tom's Tool Shed to set a higher price or a regular price? In the Nash Equilibrium in this market, will the stores set a higher price or a regular price? Tom's Tool Shed Regular High Regular [B] [D] [A] Dan's DIY [F] [H] High [E] [G]

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