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primewire primewire
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A year ago

Suppose two firms, Allstom from France, and Bombardier from Canada, are bidding on a contract to replace train cars for the subway system in Mexico City. If they bid the same amount, they share the contract-otherwise, the low bid wins. The figure below shows the payoff matrix for this contest.

Short description: A two by two matrix with columns representing Allstom (A) and rows representing Bombardier (B). Long description: The columns represent Allston (A). The column headers read, A bids 50 million dollars and A bids 35 million dollars. The rows represent Bombardier (B). The row headers read, B bids 50 million dollars and B bids 35 million dollars. The first row reads, profit to A: 10 million dollars, profit to B: 10 million dollars; profit to A: 5 million dollars, profit to B: 0 million dollars. The second row reads, profit to A: 0 million dollars, profit to B: 5 million dollars; profit to A: 2.5 million dollars, profit to B: 2.5 million dollars.

FIGURE 11-6

Refer to Figure 11-6. Given the information provided in the figure, what is the cost to either firm of completing this project on its own?



▸ $2.5 million

▸ $10 million

▸ $5 million

▸ $30 million

▸ $20 million
Textbook 
Microeconomics

Microeconomics


Edition: 17th
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brassgodbrassgod
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