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-The Above Figure Shows the Payoff to Two Airlines,A and B,of

Question 62

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 happens if the government imposes a $20 per firm tax on firms that service this route? A)  Neither firm has a dominant strategy. B)  Not entering is a dominant strategy for both firms. C)  Neither firm entering is a Nash equilibrium. D)  Only firm A will enter.
-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 happens if the government imposes a $20 per firm tax on firms that service this route?


A) Neither firm has a dominant strategy.
B) Not entering is a dominant strategy for both firms.
C) Neither firm entering is a Nash equilibrium.
D) Only firm A will enter.

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