PnrrB: 1. Assume there are two firms Burger King and McDonald's. Further assume that these are the only two firms in the fast food hamburger industry and that each wants to maximize their own prots. The following competitive scenarios exist for these two firms: If they reach an agreement to lower prices on production levels= Burger King will make $10 million in economic prots and McDonald's will make 814 million. EBurger King does not lower the price (cheats) on the agreement and McDonald's lowers the price (does not cheat)= then Burger King will earn 82 million in economic prots; while McDonald's' economic prots will be 830 million. IchDonald's does not lower the price (cheats on the agreement) and Burger King lowers the price (does not cheat), then McDonalifs will earn $15 million in economic prots; while Burger King's economic prots will be 312 million. If the agreement breaks down completely (neither lowers the price) Burger King will make an economic prot of $9 million= and McDonald's will make an economic prot of $ 13 million. a. Fill in the payoff matrix below, making sure you label everything. (ll) points] Burger King McDonald's b. What (if any) is the dominant strategy for Burger King? (10 points) c. What (if any) is the dominant strategy for McDonald's? (10 points) {1. What is the Nash equilibrium (if there is one)? Explain how you reached this conclusion. (10 points) e. According to the conditions stated above we see that Whenever Burger King lowers its price for hamburgers their revenues decline. In terms of elasticities, What does this say about the elasticity of demand for Burger King's product? Explain briey. (10 points)