Question: Two companies, A and B, simultaneously decide whether to produce a good quality product or a poor quality product. In the matrix below, the dollar

Two companies, A and B, simultaneously decide whether to produce a good quality product or a poor quality product. In the matrix below, the dollar amounts are the payoffs and they represent annual profits for the two companies.

Acme's Decision Good Quality Poor Quality Acme's profit = $6 million Acme's profit = $5 million Good Quality Pinnacle's Pinnacle's profit = $6 million Pinnacle's profit = $8 million Decision Acme's profit = $8 million Acme's profit = $7 million Poor Quality Pinnacle's profit = $5 million Pinnacle's profit = $7 million

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