Firm A and firm B are the only producers of Mac and Cheese i…

Firm A and firm B are the only producers of Mac and Cheese instant packages in the market. They know that if they cooperate and produce less Mac and Cheese packages, they could raise the price of the package. If they do not cooperate and work independently, they will each earn $100,000. If they decide to cooperate and both lower their output, they can each earn $150,000. If one firm lowers the output but the other does not, the firm that lowered the output will get $0 and the firm that did not will get $200,000, as it will capture the entire market. The table below shows the choices and correspondent outcomes: Prisoner’s Dilemma for Oligopoly   Firm A Not Cooperate (NC) Cooperate (C) Firm B NC ($100k, $100k) ($200k, $0) C ($0, $200k) ($150k, $150k) If B knows for sure that A will cooperate, B should , if A knows for sure that B will cooperate, A should , hence based on the previous answers, the dominant strategy is .