Independent University Bangladesh Summer 2021 MBA 510E: Business Economics Practice Task2 Delivered on: 22 August 2021. Problem-1 Year 2000. This is the story of two local farmers who have started to produce Strawberry in their village home in Gazipur. They are Kalachan and Rajamian. Kalachan and Rajamian have suddenly started to produce strawberry and sold the harvest to traders in Gulshan-Z at good price. They understood that if they cooperated and produced less strawberry, they could raise the price of strawberry. If they work independently, they will each earn BDT 1000 per day. If they decide to work together and both lower their output, they can each earn BDT 1500. If one farmer lowers output and the other does not, the farmer who lowers output will earn BDT 0 and the other farmer will capture the entire market and will earn BDT 2000 per day. The table below represents the choices available to two strawberry farmers Kalachan and Rajamian and their resulting payoffs (profits). Now, what is the best choice for Rajamian if he is sure that Kalachan will cooperate? Debut production of Strawberry in Gazipur Pay-off Matrix for different Pricing Options [Daily Profits in BDT] High output g; "1', ' 3.5311 W 'j: Question to answer: What is the best choice for Rajamian if he is sure that Kalachan will cooperate? (i) If Rajamian is sure that Kalachan will cooperate, then he should cheat. (ii) If Rajamian is sure that Kalachan will cooperate, then he should cooperate in keeping output low. (iii) If Rajamian is sure that Kalachan will cooperate, he should work independently. Problem2 The case of cooperation and cheating: For hotels number of guests is very important. No hotel wants to run with empty rooms. This is a case of two hotels in Heron Point of the Sundarbans. They are the Hotel Sundarbans and the Hotel Heron Point. They can cooperate for a discount on room rent and achieve high number of guests, 1000 each. Oppositely, they will have low number of guests, 500 each. Cooperate (far a discount) Nonvco'ope'rate (Cheat) Cooperate {for ta discount) Non-cooperate (cheat) Questions to answer: a. Analyse the payoffs and decide what is the dominant strategy for each of the hotels. b. Suppose both of the hotels have followed respective dominant strategies in 2021. Will anyone independently consider to adopt a different strategy in 2022? Explain your