Table 14-1 LimoZeenz and AirPorter and Are the Only Two Airport Shuttle

question 102

Multiple Choice

Table 14-1

LimoZeenz and AirPorter and are the only two airport shuttle and limousine rental service companies in the mid-sized town of Shady Shores. Each firm must decide on whether to offer its customers a mid-week discount for airport transportation. Table 14-1 shows the payoff matrix for profits earned by each company based on either offering or not offering the discount.
-Refer to Table 14-1.What is the Nash equilibrium in this game?

• A)There is no Nash equilibrium.
• B)LimoZeenz offers the discount, but AirPorter does not.
• C)AirPorter offers the discount, but LimoZeenz does not.
• D)Both LimoZeenz and AirPorter do not offer the discount.

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Definitions:

Net Income

The net income of a company, which is the remaining amount of total revenues after deducting all expenses, taxes, and costs.

Net Cash Flows

The difference between a company's cash inflows and cash outflows during a specific period, reflecting its ability to generate cash.

Cash Payback Period

The time it takes for a business to recuperate its investment in a project, measured by the flow of cash into the organization.

Net Present Value Method

A method used to evaluate investments by calculating the difference between the present value of cash inflows and outflows over a period of time.