John and Anne are the only two suppliers of snacks at school While everyone waits for a ride after sports and clubs. Each student can choose to set a high price or a low price for their goods. The payoff matrix below shows the daily prots for each combination of prices that John and Anne could set. The rst entry shows Anne's prots, and the second entry shows John's prots. Assume that both students know the information shown in the matrix. Study the matrix, and then answer the questions that follow. John High Price Low Price Anne High Price Low Price 1. Do John and Anne each have a dominant strategy to set a high price, a dominant strategy to set a low price or no dominant strategy? a. Anne i. Anne has a dominant strategy because she has a higher prot when she charges a lower price, regardless of what John does. b. John i. John does not have a dominant strategy. When Anne charges high, he charges low, and when Anne charges low, he charges high. 2. If John and Anne do not cooperate on price setting, what will be the prot for each of them? a. Anne - $24 b. John- $16 3. A club sponsor with hungry students agrees to pay $4 to John and Anne each if they charge the lower price for their snacks. Redraw the payoff matrix with this subsidy