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question 7 the enclosed graph below taken from your textbook...

Question: question 7 the enclosed graph below taken from your textbook...

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Question 7: The enclosed graph below, taken from your textbook, shows the payoff matrix of two firms facing the alternative between following the Cous uopoly strategy or a collusive agreement. The values reported in the matrix are consistent with those sown in the graph of question 6 above. Explain: ( here the values of the matrix come from; () the notion of Nash Equilibrium; (ii) which of the four cells represent the Nash equilibrium, Firm 2s output choices Q-20 Q-15 Firm 1s output choices

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