In Promaine Flats, Nevada there were two restaurants: Sal Monella and Road Kill Café. Current profit is $7,000 each. Cleaning will attract more customers, but profit will reduce to $5,000 each. However, if one cleans up and other doesn’t then profit will be $12,000 and $3,000. A. Complete Payoff Matrix(picture) B. What is each players dominant strategy.(explain) C. What is the outcome of the game.(explain)
In Promaine Flats, Nevada there were two restaurants: Sal Monella and Road Kill Café. Current profit is $7,000 each. Cleaning will attract more customers, but profit will reduce to $5,000 each. However, if one cleans up and other doesn’t then profit will be $12,000 and $3,000. A. Complete Payoff Matrix(picture) B. What is each players dominant strategy.(explain) C. What is the outcome of the game.(explain)
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
In Promaine Flats, Nevada there were two restaurants: Sal Monella and Road Kill Café. Current profit
is $7,000 each. Cleaning will attract more customers, but profit will reduce to $5,000 each. However,
if one cleans up and other doesn’t then profit will be $12,000 and $3,000.
A. Complete Payoff Matrix(picture)
B. What is each players dominant strategy.(explain)
C. What is the outcome of the game.(explain)
![Clean up
Road Kill Café (RK)
Doesn't clean up
RK=
RK=
Sal Monella (SM)
Clean up
SM=
SM=
Doesn't clean up
SM=
RK=
RK=
SM=](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fbced1420-92a5-4d34-bf39-a126b3c05392%2F1e7c8629-a538-4d1e-a4ff-634f3c22278c%2Fuko0zko_processed.png&w=3840&q=75)
Transcribed Image Text:Clean up
Road Kill Café (RK)
Doesn't clean up
RK=
RK=
Sal Monella (SM)
Clean up
SM=
SM=
Doesn't clean up
SM=
RK=
RK=
SM=
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