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  3. 4 two firms i and ii make colour and black...

Question: 4 two firms i and ii make colour and black...

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4. Two firms I and II make colour and black and white television sets. I can make either 200 colour sets a week or 200 black and white sets and makes a profit of £20 on each colour set and £10 on each black and white. II can make either 400 colour sets a week, or 200 black and white and 200 colour sets, or 400 black and white sets a week. There is a market each week for 200 colour and 400 black and white sets, and the manufacturers share the appropriate market in the proportion that they manufacture that particular set (i.e. if I ınakes 200 colour and II makes 400 colour, then I sells 200/600 x 200 ะ 66 2/3, while 11 sells400/600 x 200). (a) Set up the payoff matrix of Is profit per week. Calculate I and IIs optimal strategy and the value of the game. (b) Why is this an unrealistic game for II?

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