Assume there are two firms, A and B. Following a decrease in variable cost that affects both firms, each firm must decide to lower price or to maintain price. If firm A maintains price and B maintains its price, each firm will have profits of $120 during the time period. If Firm A lowers its price and B lowers its price, each firm will have profits of $100. If Firm A lowers its price and B maintains its price, then A has profits of 110 and B profits of 80. If Firm B lowers its price and A maintains its price, then B has profits of $150 and A profits of $80.
What stratgey will each firm follow, indicting whether each firm has a dominant stratgey or not