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Part B: [1&0 Joint Venture Aly and Simone are two young entrepreneurs, who have decided to work together on ajoint venture. Each has unique skills

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Part B: [1&0 Joint Venture Aly and Simone are two young entrepreneurs, who have decided to work together on ajoint venture. Each has unique skills and with hard work, together they can create a new product that addresses an important gap in the market. Working on thisjoint venture involves both benefits and costs. If successful, the new product could have a significant demand and provide significant profits to the two young entrepreneurs. However, it will take considerable time and effort, and these are costly. More specifically, time and effort have important opportunity costs. If the entrepreneurs were not working on this venture, they could each be working on some other separate project that also has the potential for profits. To make things concrete, let's add some numbers. If the partners both work hard, they can each earn a profit of3100,000. If neither works hard, nothing will get done and they will both make zero profit. Also assume that if one Works hard but the other doesn't, they will create a product with moderate revenue but less than ifthey both worked hard. In this case, the one who worked hard will have incurred considerable costs, while the one who did not work hard will have incurred very minimal costs. Assume that this results in a $120,000 prot to the one who did not work hard and a $40,000 loss to the one who did work hard. Profit for each entrepreneur is defined as the total revenue she receives from the sale of the product minus the total cost she incurs producing it. The numbers in this example reflect a loss to a hard worker when the other does not work hard because the hard worker incurs costs that exceed the revenue that she receives, in other words, a negative profit is a loss. l)Whatdo you expectto happen in this game? Explain (you can construct the normal form of the game}. 2) Suppose now that if one partner works hard and the other does not, the weak-worker has to pay a penalty to the hard worker of$80,000, so that after the penalty payment they both end up making $40,000. The other payoffs are the same as before. Draw a game table illustrating these payoffs. 3) What is the likely outcome for the game in 2)? Explain

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