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…

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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

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ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

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

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