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

question 171

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.Let's suppose the game starts with each firm offering the mid-week discount so that LimoZeenz earns a profit of $6,000 and AirPorter earns a profit of $12,000.Is there an incentive for any one firm to stop offering the mid-week discount?

• A)No, neither firm has an incentive to stop offering the discount.
• B)Yes, both firms have an incentive to stop offering the discount.
• C)Yes, AirPorter has an incentive to stop offering the discount, but LimoZeenz does not.
• D)Yes, LimoZeenz has an incentive to stop offering the discount, but AirPorter does not.

---

Definitions:

Gonorrhea

A sexually transmitted infection caused by the bacterium Neisseria gonorrhoeae, characterized by discharge from the genitals and, if left untreated, can lead to serious health complications.

Treponema Pallidum

The bacterium that causes syphilis, a sexually transmitted infection that can have serious health consequences if not treated.

Penicillin

A group of antibiotics used to treat various bacterial infections, derived from the Penicillium fungi.

Depo-Provera

A contraceptive injection containing progesterone that prevents ovulation, used as a form of birth control effective for three months per dose.