2. The software firm Upandcoming faced a moral hazard problem discussed in lecture about inducing its software engineers into exerting an insane amount of effort in order to maximize the company's chances of being the first to market. The company succeeded in being the first to market but now faces an adverse selection problem. Buyer B is very concerned about being hacked and thus values hardened, more secure software at $100. She would only be willing to pay $50 for weaker, more vulnerable software. B however is unsure of how secure Upandcoming's software is. She believes that the probability that she is facing type Ug, which sells secure software, is 1/5. The probability of facing Uy, selling weak software is 4/5. Hardening and testing software takes more time and more money. In order to cover its costs, type Us will not accept any price below $60 whereas Uy, will accept an offer as low as $40. Buyer B makes a take-it-or-leave-it offer to which Upandcoming can either say yes or no. (a) Complete a game tree representing the asymmetric information described above. (b) Find all subgame-perfect equilibria of the game. (c) What is the equilibrium path? (d) B is considering offering a price that is greater than 40 but less than 60. Can such a price ever be a best response for B when Upandcoming's strategy is sequentially rational? Explain why or why not