Question 2: Consider a duopoly game in which two firms simultaneously…

Consider a duopoly game in which two firms simultaneously and independently select prices that are greater than or equal to zero. Denote firm 1's price as $P_1$ and firm 2's price as $P_2$.

After the prices are set, consumers demand $10 - P_1 + P_2$ units of the good that firm 1 produces, and they demand $10 - P_2 + P_1$ units of the good that firm 2 produces. Assume that each firm produces at zero cost, so firm $i$'s payoff (profit) is $(10 - P_i + P_j)P_i$, where $P_i$ is firm $i$'s price and $P_j$ is the other firm's price. Answer the given sub questions based on this information:

Choose the incorrect statement