Answer the following:

Part 1 (6.2 points) See Hint Gas stations 1 and 2, on opposite sides of the street, compete for customers. Both stations have the same options when setting prices in the morning: set either high or low prices. Because their products (gasoline) are nearly identical, the following revenue outcomes are possible: (i) each station chooses high prices and each station makes $150.00, (ii) each station chooses low prices and each station makes $75.00, or (iii) when one gas station chooses high prices and the other chooses low prices, the high-priced gas station makes $65.() and the low-priced gas station makes $95.00. Where these gas stations differ, however, is in how much it costs to set prices each morning. Gas station 1 has a digital price display, and it costs $2.00 to update prices each morning. Gas station 2 has to manually change its prices each morning, and it costs $6.00 to do so. Assume that (i) these costs are always paid each morning even if the station is not changing prices from the previous day, and (ii) there are no other costs. Use the above information to generate the payoff (profit) values in the table below. In each cell, payoffs should be structured as (Gas Station 1, Gas Station 2). Gas Station 2 High Low High Gas Station 1 Low Part 2 (0.8 point) See Hint Identify the equilibrium in this game. Choose one: O A. Gas station 1 chooses high, gas station 2 chooses low. Q B. Gas station 1 chooses low. gas station 2 chooses high. Q C. There is no pure strategy equilibrium. O D. Gas station 1 chooses high, gas station 2 chooses high. O E. Gas station 1 chooses low, gas station 2 chooses low. O F. There are multiple pure strategy equilibria