Each firm is deciding to offer a frequent flyer program

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Reference no: EM1315538

Q1. Elucidate how does the study of economics depend on the phenomenon of scarcity

Q2. In the Castorian Airline market there are only two firms. Each firm is deciding whether to offer a frequent flyer program. The annual profits (in millions of dollars) associated with each strategy are summarized in the subsequent table (where the first number is the payoff to Airline A also the second to Airline B): a) Does either player have a dominant strategy? Elucidate. b) Is there Nash equilibrium in this game? If so illustrate what is it? c) Is this game an example of the prisoners' dilemma? Elucidate.

Reference no: EM1315538

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