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1 . This figure below displays the choices being made by two coffee shops: Starbucks and Dunki Donuts. Both companies are trying to decide whether
This figure below displays the choices being made by two coffee shops: Starbucks and Dunki Donuts. Both companies are trying to decide whether or not to expand in an area. The area can handle only one of them expanding, and whoever expands will cause the other to lose some business. If they both expand the market will be saturated, and neither company will do well. The payoffs are the additional profits or losses they will earn. Expand S: $m DD: $m Dunkin Donuts Expand Do not expand S: $m DD: Sim Starbucks Do not expand Expand S: Sim DD: $m Dunkin Donuts Do not expand I S: $ DD: $ a According to the figure shown, if Starbucks expands in the market, then what should Dunkin Donuts do b According to the figure shown, if Dunkin Donuts expands, then what should Starbucks do c What will be the outcome of the game in the figure shown? d What will be starbucks profit as the outcome of the game in the figure shown predicts? e If the players in the figure shown act in their own selfinterest, then we know what will be Dunkin Donuts nrofit? words D English United States
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