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

question 1

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,and the government imposes a $20 per firm tax on firms that service this route,which of the following maximizes the firms' joint profits?

• A) Neither firm services the route.
• B) Firm A offers firm B $20 to not enter.
• C) Both firms will service this route.
• D) Firm B offers firm A $30 to not enter.

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Definitions:

Greenhouse Effect

Warming of Earth’s lower atmosphere and surface as a result of heat trapped by greenhouse gases.

Primary Production

The production of organic compounds from atmospheric or aquatic carbon dioxide, principally through the process of photosynthesis or chemosynthesis.

Photosynthesis

The process by which green plants, algae, and some bacteria convert light energy into chemical energy stored in glucose, using carbon dioxide and water.