Pricing Game

Ed's Shed and Phunny Pharms are two rival roadside produce stands. Each can choose between a price of $2 or $1 per pound for their tomatoes. Here are their payoffs.

Phunny Pharms
$2 $1
Ed's Shed $2 20,20 10,30
$1 30,10 15,15

In equilibrium,

Ed charges $1 and Phunny Pharms charges $2
Ed charges $2 and Phunny Pharms charges $1
both charge $1
both charge $2
they make the largest total profit that they can