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Consider a Caribbean cruise route served by two cruise lines, Carnival and Royal Caribbean. Both lines must choose whether to charge a high price ($280280) or a low price ($260260) to vacationers. These price strategies with corresponding profits are illustrated in the payoff matrix to the right. Carnival's profits are in red and Royal Caribbean's are in blue. Suppose the cruise lines decide to collude. At which outcome are joint profits maximized? Joint profits are maximized when Carnival picks $260 and Royal Caribbean picks $
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Consider a Caribbean cruise route served by two cruise lines, Carnival and Royal Caribbean. Both lin...
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