Café B'sstrategies80 cups50 cups$1500$500O $3,000; 80; 80; 80If the firms can collude, industry profits equalcups of coffee each.In the Nash equilibrium, Cafe A will offerof coffee.O $4,000; 50; 80; 80O $4,000; 80; 50; 50O $3,000; 50; 80; 80O $3,000; 100; 50; 50Café A's strategies80 cups$1500$250050 cups$2500There are only two coffee shops in Ames, and they are trying to decide how many cups ofcoffee to offer. The payoff matrix for this duopoly game is shown above.$2000and both firms would offer$500cups of coffee, and Cafe B will offer$2000cups

A payoff matrix is a table that lists the strategy of one player in rows and another player in…

Answered: If the firms can collude, industry…

If the firms can collude, industry profits equal cups of coffee each. In the Nash equilibrium, Cafe A will offer of coffee. and both firms would offer cups of coffee, and Cafe B will offer cups

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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