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Question 3 (10 points) There are two undeveloped lots remaining in a small city. The lot owners are considering whether to develop each lot for commercial or residential use (city zoning would permit either use). One lot is located on the north side of town, while the other lot is located on the south side. The lot owners' prots net of any additional costs are given in the matrix below; both owners have all of this information. North Side Lot Commercial Residential East: $4M prot East: $9M prot Commercial South Side Lot East: $7M prot East: $5M prot Residential West: $7M prot West: $10M prot a. In game theory, what is a 'best response' function? Apply the concept to this game and nd the North Side lot owner's best response function. b. In game theory, what is a 'dominant strategy'? In this game, does either lot owner have a dominant strategy? Explain. c. If the lot owners will make their decisions simultaneously (meaning, neither owner will know the other's choice in advance), what outcome do you expect and why? Use numbers from the table to explain