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Profit payoff matrix for oligopolists c and d

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Explain the general meaning of the following profit payoff matrix for oligopolists C and D.  All profit figures are in thousands.

a. Use the payoff matrix to explain the mutual interdependence that characterizes oligopolistic industries.

b.  Assuming no collusion between C and D, what is the likely pricing outcome?

c.   In view of your answer to 6b, explain why price collusion is mutually profitable.  Why might there be a temptation to cheat on the collusive agreement?

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Reference no: EM131026203

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