The payoff matrix supplied shows outcomes of various strategies that two W firms might follow in response to action on the part of the other company. This payoff matrix describes actions in developing vaccines for not-too-rare but also not-too-common diseases. Each element shows the payoffs to a set of strategies as the payoff to the domestic firm, then a comma, then the payoff to the foreign firm. Domestic firm Enter 42 Foreign firm Enter Not Enter -41,-41 183,0 Not Enter 0,183 0,0 What is the minimum subsidy the US must offer the domestic firm to ensure that it will choose to produce the vaccine?
The payoff matrix supplied shows outcomes of various strategies that two W firms might follow in response to action on the part of the other company. This payoff matrix describes actions in developing vaccines for not-too-rare but also not-too-common diseases. Each element shows the payoffs to a set of strategies as the payoff to the domestic firm, then a comma, then the payoff to the foreign firm. Domestic firm Enter 42 Foreign firm Enter Not Enter -41,-41 183,0 Not Enter 0,183 0,0 What is the minimum subsidy the US must offer the domestic firm to ensure that it will choose to produce the vaccine?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Give typing answer with explanation and conclusion
![The payoff matrix supplied shows outcomes of various strategies that two
firms might follow in response to action on the part of the other company.
This payoff matrix describes actions in developing vaccines for not-too-rare
but also not-too-common diseases. Each element shows the payoffs to a set
of strategies as the payoff to the domestic firm, then a comma, then the
payoff to the foreign firm.
Domestic firm
Enter
42
Foreign firm
Enter Not Enter
-41,-41 183,0
Not Enter 0,183 0,0
What is the minimum subsidy the US must offer the domestic firm to ensure
that it will choose to produce the vaccine?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F568de202-0203-4c40-b981-a04889456726%2F9f747ffc-b3fc-41b3-80d5-2c776fc5d7bc%2F1bksghb_processed.jpeg&w=3840&q=75)
Transcribed Image Text:The payoff matrix supplied shows outcomes of various strategies that two
firms might follow in response to action on the part of the other company.
This payoff matrix describes actions in developing vaccines for not-too-rare
but also not-too-common diseases. Each element shows the payoffs to a set
of strategies as the payoff to the domestic firm, then a comma, then the
payoff to the foreign firm.
Domestic firm
Enter
42
Foreign firm
Enter Not Enter
-41,-41 183,0
Not Enter 0,183 0,0
What is the minimum subsidy the US must offer the domestic firm to ensure
that it will choose to produce the vaccine?
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