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

question 5

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,which one of the following statements is TRUE?

• A) Only firm A will enter the market.
• B) Only firm B will enter the market.
• C) Neither firm entering is a Nash equilibrium.
• D) The outcome of the game is unpredictable.

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Definitions:

Automobile Dealer

A business entity that sells new or used cars at the retail level, based on a dealership contract with an automaker.

Liabilities

Financial obligations or debts that a business owes to external parties.

Owner's Equity

The residual interest in the assets of a business after deducting liabilities, representing the owner's claim against the company's assets.

Ratio

A quantitative relationship between two numbers, showing how many times one value is contained within another.