-The Above Figure Shows the Payoff to Two Airlines,A and B,of

question 62

Multiple Choice

-The above figure shows the payoff to two airlines,A and B,of serving a particular route.If the two airlines must decide simultaneously,what happens if the government imposes a $20 per firm tax on firms that service this route?

• A) Neither firm has a dominant strategy.
• B) Not entering is a dominant strategy for both firms.
• C) Neither firm entering is a Nash equilibrium.
• D) Only firm A will enter.

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Definitions:

Exponential Service Times

A statistical concept used in queueing theory where the times between arrivals of service requests follow an exponential probability distribution.

Arrival Rate

The frequency at which units, entities, or events arrive or occur over a specified period, often assessed in queuing theory and logistics.

Service Rate

The speed at which a service provider can deliver its service to customers.

Waiting Line

Refers to the process where customers or items wait in line for service or processing, commonly studied to improve efficiency in operations management.