AirPorter (AP)Don'tofferOfferDon't offerAP earns$8,000LimoZeenz (LZ)AP earns$10,000LZ earns$16,000LZ earns$8,000AP earns$15,000AP earns$12,000OfferLZ earns$12,000AirPorter offers the discount, but LimoZeenz does not.Both LimoZeenz and AirPorter do not offer the discount.There is no Nash equilibrium.LimoZeenz offers the discount, but AirPorter does not.LZ earns$6,000LimoZeenz and AirPorter and are the only two airport shuttle. Each firm must decideon whether to offer its customers a mid-week discount for airport transportation.The table above shows the payoff matrix for profits earned by each company basedon either offering or not offering the discount.Refer to the table above, what is the Nash equilibrium in this game?

There are two players : Air Porter (AP ) & LimoZeenz (LZ ) Strategy set of Player AP = Strategy…

Answered: LimoZeenz and AirPorter and are the…

LimoZeenz and AirPorter and are the only two airport shuttle. Each firm must decide on whether to offer its customers a mid-week discount for airport transportation.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: You own a set of sports memorabilia that you could sell in Rochester and Minneapolis. You could sell…

A: Arbitrage is defined as a kind of strategy or trading which exploits a difference in price between…

Q: A small, local restaurant in St. Augustine, FL, serves scrambled eggs for breakfast. The market for…

A: Here, the given graph provides information about a firm in monopolistically competitive market.…

Q: Define and give a few examples: Pricing Tactics Price Discriminations Pricing Sturcture

A: Pricing tactics are tactics used by firms to maximize profit and reduce cost. Example Firm using…

Q: Why is it difficult to regulate a monopolistically competitive market to increaseefficiency?

A: Different forms of market structures differ in their level of competitiveness, ranging from highly…

Q: what is an example of parallel pricing ?

A: Parallel pricing is a method of copying other companies' pricing strategies, especially…

Q: A pure monopolistic firm knows the following about its costs and revenue. The firm would like to…

Q: Use a detailed example to discuss the definition and rationale of Price Discrimination.

A: A pricing approach known as price discrimination charges customers varying rates for the same goods…

Q: Use an example to discuss the definition and rationale of Price Discrimination

A: The term 'price discrimination' is used in economic study when consumers and sellers interact with…

Q: Price Quantity Total Cost $25.00 0 $130 $24.00 10 $275 $23.00 20 $435 $22.50 30 $610 $22.00 40 $800…

A: A firm maximizes profit by producing output at a level where Marginal Revenue is equal to Marginal…

Q: 14-2 German Brothels German brothels recently began offering a monthly subscription service for…

A: The problem of prostitution and its effects on society provide a difficult and diverse task.…

Q: What would cause a monopolistic competitive optometrist to face a down-ward sloping demand curve?

A: A monopolistic market is characterized by the presence of a single firm in the market. A single firm…

Q: A monopolistic competitor maximizes proft by producing 165 units at a marginal cost of $8. The…

A: GIVEN DETA A monopolistic competitor maximizes proft by producing 165 units a marginal cost of…

Q: Is the outcome in a monopolistically competitive market desirable from the standpoint of society?…

A: A monopolistic competitive market is the one where firms provide differentiated goods which makes…

Q: Why is demand curve facing monopolistic competition firm likely to be more elastic?

A: Monopolistic competition is a market condition in which there are many vendors of a single product,…

Q: In what way(s) is a monopolistically competitive firm inefficient? Group of answer choices It…

A: The question is asking about the inefficiencies that are associated with a monopolistically…

Q: For a monopolistically competitive firm, marginal revenue is equal to price. is this true or…

A: Consider what is the marginal revenue ? Marginal revenue is the change in the revenue from an…

Q: Assume a company can offer customers cable television and internet service at a marginal and average…

A: Marginal cost -The marginal cost refers to the additional cost in production generated by the…

Q: As a monopolistic competitor, what quantity does DeBeers produce? What price do they charge?

A: A monopolistic competitor faces a downward sloping demand and marginal revenue (MR) function. To…

Q: A monopolistically competitive firm maximize profit where

A: Monopolistically competitive:- Monopolistic competition describes an economy where several…

Q: O Macmillan Learning Suppose that a small-town theater has six potential customers and is looking to…

A: Step 1:Step 2:Step 3:Additional comment: 1.dear remember for less price ticket high paying customers…

Q: Is “product crimpling” a horizontal or a vertical product differentiation? Why?

A: Product differentiation refers to the marketing strategy in which a product is differentiated from…

Q: Is a monopolistically competitive firm productively efficient? Is it allocatively efficient? Why or…

A: Monopolistic competition is a kind of imperfect market structure where there is large number of…

Q: Some years ago, two intercity bus companies, Greyhound Lines, Inc. and Trailways Transportation…

A: The antitrust law is developed to protect the consumer from unfair practices of businesses. The laws…

Q: Suppose an airline sells air tickets to two types of customer – business travelers and vacation…

A: Price can be calculated by using the following formula.

Q: What are some of the major criticisms of advertising?Whal is cortective advettising? Whal is…

A: Criticisms: Though advertising is giving many advantages, there are many disadvantages and…

Q: A small, local restaurant in St. Augustine, FL, serves scrambled eggs for breakfast. The market for…

A: At the marketplace, economic efficiency is divided into two parts to explain the production and…

Q: List and discuss the key characteristics of organi-zational buying that make it different from…

A: An organization can be any sector that imports the raw materials required to manufacture completed…

Q: If this is a market for a monopolistically competitive firm selling hair products. Choose all that…

A: Monopolistic competition is one type of market condition where many sellers face the market demand…

Q: What are ways in which a monopolist can engage in price discrimination?

A: Price discrimination is a pricing strategy in which a firm charges different prices for the same…

Q: definition and characteristics of monopolistic market structure

A: Market structure- It is the nature and degree of competition for goods and services in the market.

Q: Draw pictures to describe how consumer surplus is changed by sucessful third-degree price…

A: Third-degree price discrimination, also known as market segmentation of pricing discrimination,…

Q: Would a company selling in a monopolistic competitive market potentially produce a product with a…

A: A Monopolistically competitive firm potentially produces at a point where the Marginal Cost is equal…

Q: The figure below depicts a monopolistically competitive firm operating in the short run. Label the…

A: A monopolistically competitive market has a large number of firms selling differentiated products.…

Question

AirPorter (AP)
Don't
offer
Offer
Don't offer
AP earns
$8,000
LimoZeenz (LZ)
AP earns
$10,000
LZ earns
$16,000
LZ earns
$8,000
AP earns
$15,000
AP earns
$12,000
Offer
LZ earns
$12,000
AirPorter offers the discount, but LimoZeenz does not.
Both LimoZeenz and AirPorter do not offer the discount.
There is no Nash equilibrium.
LimoZeenz offers the discount, but AirPorter does not.
LZ earns
$6,000
LimoZeenz and AirPorter and are the only two airport shuttle. Each firm must decide
on whether to offer its customers a mid-week discount for airport transportation.
The table above shows the payoff matrix for profits earned by each company based
on either offering or not offering the discount.
Refer to the table above, what is the Nash equilibrium in this game?

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1: Describe the game

VIEW

Step 2: Find the Nash equilibrium for the game

VIEW

Solution

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

In what way(s) is a monopolistically competitive firm inefficient? Group of answer choices It charges a price lower than marginal cost. It produces where marginal revenue is equal to marginal cost. It does not produce at the minimum of its average cost curve.
how to calculate equilibrium price and quantity for a monopolistic market
A decrease in the number of competitors in a monopolistically competitive market causes an increase in the price elasticity of demand for the output of each of the remaining firms in the market.
Please DRAW & write neatly (no cursive) showing all work. You are studying a restaurant, that sells only pasta, and operates in a monopolistically competitive environment. This restaurant sells pasta made from its own brand of pasta called Gino's Pasta. This restaurant faces its own individual demand curve given by: QD = 120 − 30pNow suppose that in this example, the restaurant has the total costs defined by: TC = 40 + 2Q Draw a figure that includes:a. The Demand Curveb. The MR Curvec. The MC Curved. The ATC Curve.
Complete the following table by matching each of the scenarios to the concept of resale price maintenance, predatory pricing, or bundling. Resale Price Maintenance Predatory Pricing Scenario Citron is a firm that manufactures electric scooters. Suppose Citron sells its electric scooters to online retailers for $830 each and requires those online retailers to charge at least $840 to shoppers for each electric scooter. Hynes sells a wide variety of condiments to retail grocery stores. Hynes recently developed two new condiments: a popular barbacuffalo and a much less popular green ketchup. Hynes requires grocery stores to order 10 bottles of the green ketchup for every 100 bottles of the barbacuffalo bought. Warm Winds is the only firm producing air fryers. It costs $430 to produce one air fryer, and Warm Winds sells each air fryer for $850. After Sirocco, a new firm with the same costs as Warm Winds, enters the market for air fryers, Warm Winds starts selling its air fryers for a price…
Why is demand curve facing a monopolistic competition firm likely to be more elastic?
I understand how to compute the revenue but I'm stuck on computing the elasticity.
Explain by using GRAPH/GRAPHS about airline industry and price discrimination.