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

question 12

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) Both firms will enter profitably.
• B) Firm A will decide not to enter since firm B will.
• C) Firm B is still better off not entering.
• D) Neither firm will have a dominant strategy.

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Definitions:

Unemployment

The situation when individuals who are capable of working and actively seeking employment cannot find a job.

Ultimatum Game

An economic experiment and game theory scenario where two players decide how to divide a sum of money between them.

Proposals

Formal plans or suggestions put forward for consideration or discussion by others, often related to projects, research, or policy changes.

Distribution

The process of making a product or service available for consumption by a consumer or business user.