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1. Review the following game below. Zport Co. Offer Lo-Profile Offer Tires Sunroof Moto Corp. Offer CD Changer 40. 400 100, 200 Offer Free Maintenance
1. Review the following game below. Zport Co. Offer Lo-Profile Offer Tires Sunroof Moto Corp. Offer CD Changer 40. 400 100, 200 Offer Free Maintenance 0, 300 160, 120 (a) When Moto Corp. offers Free Maintenance, what should Zport Co. do? Explain why. (3 points) (b) When Zport Co. offers "Lo-Profile Tires", what is Moto Corp's best response? Explain why. (3 points) (c) In the context of game theory, first define a "dominant strategy". Then answer the following: is Moto Corp's response in part (1.b) above a clear dominant strategy? Explain your answer. (4 points) 2. Please review the game below. [Assume that positive numbers imply profits while negative numbers imply losses. The two firms have different strategies, but every other feature of a general game applies to this case.]
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