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Assume That Two Gyro Restaurants, Alpha and Beta, Are Competing

question 70

Essay

Assume that two gyro restaurants, Alpha and Beta, are competing for customers and if they both offer a student discount, they would each earn $60,000 in profits.If neither offers a student discount, they each earn $100,000 in profits.If one offers a student discount and the other doesn't, the restaurant that offers the discount earns $80,000 in profit while the other earns $40,000 in profit.
a.Present the information above in the form of a payoff matrix.Let Beta be the row player and Alpha the column player.
b.Does each firm have a dominant strategy and if so what is it?
c.What is the Nash equilibrium?


Definitions:

K

The symbol for Potassium, a chemical element with the atomic number 19, essential for many bodily functions.

HI

A chemical formula representing hydrogen iodide, a diatomic molecule consisting of hydrogen and iodine.

pH

A scale used to specify the acidity or basicity of an aqueous solution, ranging from 0 (acidic) to 14 (basic), with 7 being neutral.

K

The chemical symbol for Potassium, an essential dietary mineral and electrolyte involved in nerve function, muscle contraction, and fluid balance.

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