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

question 23

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 will happen if the government offers a $30 subsidy to airlines that serve this route?

• A) The Nash equilibrium remains the same.
• B) Only firm A will have a dominant strategy.
• C) Both firms will choose to enter the market.
• D) Joint profts will be maximized.

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