Two firms have the following options: Hold Down Output (cooperate with other firm) or Increase Output (do not cooperate with other firm) Consider the following payoff matrix:

		Firm B
		Hold Down Output	Increase Output
Firm A	Hold Down Output	A gets $5000 B gets $5000	A gets $1000 B gets $8000
	Increase Output	A gets $8000 B gets $1000	A gets $2000 B gets $2000

What is the dominant strategy for Firm A?

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What is the dominant strategy for Firm B?

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What is the Nash Equlibrium (in pure strategy)?

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