-The above figure shows the payoff to two airlines,A and B,of serving a particular route.If the two airlines must decide simultaneously,which one of the following statements is true?
A) Since firm B has no dominant strategy, its decision is unpredictable.
B) Since firm B's decision is unpredictable, firm A's decision is unpredictable.
C) Neither firm entering is a Nash equilibrium.
D) Firm B will not enter because it knows firm A will.

Question

-The above figure shows the payoff to two airlines,A and B,of serving a particular route.If the two airlines must decide simultaneously,which one of the following statements is true?
A) Since firm B has no dominant strategy, its decision is unpredictable. 
B) Since firm B's decision is unpredictable, firm A's decision is unpredictable. 
C) Neither firm entering is a Nash equilibrium. 
D) Firm B will not enter because it knows firm A will.

Quizplus · Accepted Answer

The Answer is D

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