Consider a situation of price competition between two firms. Both firms have the same unit costs of c = 20.
(i) First assume firms choose their price simultaneously. Explain precisely whether (PA = 25, PB = 24.99) is a Nash Equilibrium in this game.
(ii) Now suppose firm A sets its price PA before firm B chooses price PB. Again explain precisely whether (PA = 25, PB = 24.99) is a SPE in this game.