|Delta Company||Delta Company|
|Beta Company||Low||6,000; 6,500||8,000; 8,500|
|Beta Company||High||7,500; 7,000||7,000; 8,500|
The payoff matrix above shows the possible profits of Beta and Delta, two companies who compete within the same market and must each decide on either a low or high price. The first entry in each cell shows Beta Company’s expected profit while the second entry shows Delta Company’s expected profit.
If both firms incur an increase in marketing costs of 3,500, what will be Beta Company’s expected profit?