CENGAGE MINDTAP Q Search this course Homework (Ch 17) 8. Collusive outcome versus Nash equilibrium Consider a remote town in which two restaurants, All-You-Can-Eat Caf and GoodGrub Diner, operate in a duopoly. Both restaurants disregard health and safety regulations, but they continue to have customers because they are the only restaurants within 80 miles of town. Both restaurants know that if they clean up, they will attract more customers, but this also means that they will have to pay workers to do the cleaning If neither restaurant cleans, each will earn $12,000, alternatively, if they both hire workers to clean, each will earn only $9,000. However, if one cleans and the other doesn't, more customers will choose the cleaner restaurant; the cleaner restaurant will make $16,000, and the other restaurant will make only $4,000 Complete the following payoff matrix using the information just given. (Note: Al-You-Can-Eat Caf and GoodGrub Diner are both profit-maximizing Pirms.) GoodGrub Diner Cleans Up Doesn't Clean Up $ Clean Up All-You-Can-Eat Caf Doesn't Clean Up 5 and If All-You-Can-Eat Caf and GoodGrub Diner decide to collude, the outcome of this game is as follows: All-You-Can-Eat Caf GoodGrub Diner does not clean cleans 3: All If both restaurants decide to cheat and behave noncooperatively, the outcome reflecting the unique Nash equilibrium of this You-Can-Eat Cafe , and GoodGrub Diner