Consider the price strategy of Delta Airlines for its Detroit-to-Philadelphia route. In this game spirit is a potential competitor along the same route. Spirit will make competitive profits on less-popular routes if it does enter the market for this service. The matrix representing this game is as follow:
Delta
Low Fare High Fare
Spirit Enter 0,0 5,10
Stay out 2,20 2,25
1.Is there a dominant strategy for either of the two companies? If so, what is the respective strategy?
2.Is there unique Nash equilibrium? If so what is it?
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