-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.