A duopoly is a market structure with two firms. ABC Travel and Volta Travel are

Question

A duopoly is a market structure with two firms. ABC Travel and Volta Travel are duopolists offering air travel between two locations. With two different choices of amenities-executives service and limited service - they enjoy different levels of profits. Over a period of operating experience, an economist has discovered if ABC Travel offers limited service and Volta Travel offers limited service, they earn $40 million. Conversely, if ABC Travel offers executive service and Volta Travel offers executive service, they earn $50 million and $70 million, respectively. However, if ABC Travel offers executive service and Volta Travel offers limited service, they earn $25 million and $60 million, respectively. Finally, if Volta Travel offers executive service and ABC Travel offers limited service, they earn $30 million and $80 million, respectively. The Nash equilibrium is: ABC Travel -- executive service, Volta Travel - executive service. ABC Travel - limited service, Volta Travel - limited service. ABC Travel - executive service, Volta Travel - limited service. ABC Travel - limited service, Volta Travel - executive service. There is no Nash Equilibrium. There are multiple Nash equilibriums.

Explanation / Answer

for this case the nash equilibrium is set by the alternative A.

the remining alternatives are not providing nash equilibrium

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