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Table 11-10 Ming and Henri Each Run One of the Two Dry

question 377

Multiple Choice

Table 11-10
$\begin{array}{c}\text { Ming }\\\text { Henri }\begin{array}{|l|l|l|}\hline & \begin{array}{l}\text { offers free pickup } \\\text { and delivery }\end{array} & \begin{array}{l}\text { does not offer free pickup } \\\text { and delnvery }\end{array} \\\hline \begin{array}{l}\text { offers free pickup } \\\text { and delivery }\end{array} & \begin{array}{l}\text { Ming } \$ 20,000 \\\text { Henri: } \$ 50,000\end{array} & \begin{array}{l}\text { Ming } \$ 10,000 \\\text { Henri } \$ 25,000\end{array} \\\hline \begin{array}{l}\text { does not offer free pickup } \\\text { and delivery }\end{array} & \begin{array}{l}\text { Ming } \$ 30,000 \\\text { Henri: } \$ 40,000\end{array} & \begin{array}{l}\text { Ming } \$ 15,000 \\\text { Henri } \$ 45,000\end{array} \\\hline\end{array}\end{array}$
Ming and Henri each run one of the two dry cleaning facilities in the town of Scaraby.Both consider offering free pickup and delivery services. Table 11-10 shows the payoff matrix containing the expected quarterly profits for each firm.
-Refer to Table 11-10.What is the Nash equilibrium in this game?

Definitions:

Manufacturing Overhead Costs

Indirect expenses related to the production process, such as utilities, depreciation, and salaries for factory support staff.

Return on Investment

A measure used to evaluate the efficiency or profitability of an investment, calculated by dividing the benefit (return) of an investment by the cost of the investment.

Investment Center

A business unit within an organization that is responsible for its own revenues, expenses, and investments, and is evaluated on its return on investment.

Operating Assets

Assets that are used in the daily operations of a business to generate revenue, such as machinery, buildings, and equipment.