Two railroads, Big East and Little East have the choice of pricing high or low. Each company's profit depends on how the other company responds to...

Two railroads, Big East and Little East have the choice of pricing high or low. Each company’s profit depends on how the other company responds to its pricing strategy. If both firms collude andagree on a high price, they each earn $30 in profit. If one prices low and the other priceshigh, the low-price firm earns $50 while the high price earns $4’. a.