Question: Please help?!?! Question 9 (Challenging). In an isolated town two pizza shops open. Their owners Mario and Luigi are deciding what price to set of

Please help?!?!

Please help?!?! Question 9 (Challenging). In an isolated town two pizza shops

Question 9 (Challenging). In an isolated town two pizza shops open. Their owners Mario and Luigi are deciding what price to set of the menu. Before the opening night of both stores they discuss their pricing and work our that a price of $15 is going to bring the greatest benefit to them. Both know that there are 10 potential customers on any given night and that if they decrease their price to $14 then everyone would buy from their shop. Pizza's cost $10 to produce. a) Draw the normal form of the game for the first day of opening b) What time of game does this represent? What are the key features (NE, Dominate Strategies)? 0) Reconstruct the normal form of the game using the above information d) Do any of the key features change? e) Reconstruct the normal form of the game using the above information f) Do any of the key features change? 9) What proportion of people need to be loyal in order to move the Nash equilibrium to the socially optimal outcome? h) Is it possible to have a coordination game with any level of loyal customers? Is it possible in the case with the $100 cost to change prices? If so for both how do these two levels compare

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