-Determine the optimal strategy for the situation by representing it as a game and finding the saddle point. State your final answer in the terms of the original question.

(PLEASE SEE ATTACHED IMAGES TO ASSIST WITH MATH PROBLEM & TO REVIEW SAMPLE PROBLEMS FOR THE SADDLE POINT GAME)

-In an ongoing price war between Burger Haven (locally owned) and MacArches (a chain), both restaurant managers plan to change the price of a hamburger by 10. If they both raise their prices, there will be no change in their market shares, but if they both lower their prices, the chain's national advertising will ensure that MacArches gains6%of the market. Again because of advertising, if Burger Haven lowers their price and MacArches raises their price, Burger Haven will gain only4%of the market, but if Burger Haven raises their price and MacArches lowers their price, MacArches will gain10%of the market. Use this information to decide what the managers should do.

-MacArches

L: __%

R: __%

-Burger Haven

L: __%

R: __%

-What doesLrepresent?

o Lrepresents lowering the price by 10.

o Lrepresents raising the price by 10.

-What doesRrepresent?

o Rrepresents lowering the price by 10.

o Rrepresents raising the price by 10.

-The saddle point is the___in row___and column___.

-What should the managers do?

o Both restaurants should lower the price.

o MacArches should lower its prices, while Burger Haven raises its prices.

o Burger Haven should lower its prices, while MacArches raises its prices.

o Both restaurants should raise the price.

\f\f\f\f\f\f\f\f\f