Solved

Table 14-1 LimoZeenz and AirPorter and Are the Only Two Airport Shuttle

Question 96

Multiple Choice
Table 14-1 LimoZeenz and AirPorter and are the only two airport shuttle and limousine rental service companies in the mid-sized town of Shady Shores. Each firm must decide on whether to offer its customers a mid-week discount for airport transportation. Table 14-1 shows the payoff matrix for profits earned by each company based on either offering or not offering the discount. -Refer to Table 14-1.Let's suppose the game starts with each firm offering the mid-week discount so that LimoZeenz earns a profit of $6,000 and AirPorter earns a profit of $12,000.Is there an incentive for any one firm to stop offering the mid-week discount?

Table 14-1
Table 14-1 LimoZeenz and AirPorter and are the only two airport shuttle and limousine rental service companies in the mid-sized town of Shady Shores. Each firm must decide on whether to offer its customers a mid-week discount for airport transportation. Table 14-1 shows the payoff matrix for profits earned by each company based on either offering or not offering the discount. -Refer to Table 14-1.Let's suppose the game starts with each firm offering the mid-week discount so that LimoZeenz earns a profit of $6,000 and AirPorter earns a profit of $12,000.Is there an incentive for any one firm to stop offering the mid-week discount? A) No, neither firm has an incentive to stop offering the discount. B) Yes, both firms have an incentive to stop offering the discount. C) Yes, AirPorter has an incentive to stop offering the discount, but LimoZeenz does not. D) Yes, LimoZeenz has an incentive to stop offering the discount, but AirPorter does not.
LimoZeenz and AirPorter and are the only two airport shuttle and limousine rental service companies in the mid-sized town of Shady Shores. Each firm must decide on whether to offer its customers a mid-week discount for airport transportation. Table 14-1 shows the payoff matrix for profits earned by each company based on either offering or not offering the discount.
-Refer to Table 14-1.Let's suppose the game starts with each firm offering the mid-week discount so that LimoZeenz earns a profit of $6,000 and AirPorter earns a profit of $12,000.Is there an incentive for any one firm to stop offering the mid-week discount?


A) No, neither firm has an incentive to stop offering the discount.
B) Yes, both firms have an incentive to stop offering the discount.
C) Yes, AirPorter has an incentive to stop offering the discount, but LimoZeenz does not.
D) Yes, LimoZeenz has an incentive to stop offering the discount, but AirPorter does not.

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Q91: Table 14-1
Table 14-1 </p></div><svg width=

Q92: The prisoner's dilemma illustrates
A)how oligopolists engage in

Q93: The study of how people make decisions

Q94: Which of the following economists did not

Q95: A Nash equilibrium is
A)reached when an oligopoly's

Q97: All of the following are characteristics of

Q98: Table 14-1
Table 14-1 </p></div><svg width=

Q99: Which of the following is an example

Q100: Table 14-1
Table 14-1 </p></div><svg width=

Q101: Table 14-3
Table 14-3 </p></div><svg width=

Unlock this Answer For Free Now!

View this answer and more for free by performing one of the following actions

qr-code

Scan the QR code to install the App and get 2 free unlocks

upload documents

Unlock quizzes for free by uploading documents