Question 1 Jetstar wants to enter the market serving routes that will compete head to head with Virgin. Jetstar knew that Virgin might respond in one of two ways: Virgin could start a price war or it could be "accommodating," keeping the price at a high level. Jetstar had to decide whether it would enter on a small scale or on a large scale. The annual profits (in zillions of dollars) associated with each strategy are summarized in the following table (where the first number is the payoff to Jetstar and the second the payoff to Virgin):

Virgin Accommodate Price Low {Price High) {Price War) Enter on Small Scale 8. 40 2,32 Jelslar Enter on Large Scale 16 20 4 24