# Dar A and Bar Bare located across the street from each other , and are both deciding how much to charge for a pint of beer : \$10 or \$1 . There are…

• Bar A and Bar B are located across the street from each other, and are both deciding

how much to charge for a pint of beer: \$10 or \$4. There are 100 potential customers.

Of these, x are loyal customers of Bar A: they will each buy their pint of beer from

Bar A, no matter what prices each bar charges. The remaining 100-x customers will

buy their pint from whichever bar charges the lowest price. If both bars charge the

same price, each of these 100-x customers will choose randomly between the two

bars so that, on expectation, half of them will end up at each bar. Payoffs for each

bar are equal to expected revenues.

1 . Dar A and Bar Bare located across the street from each other , and are both decidinghow much to charge for a pint of beer : \$10 or \$1 . There are Ing potential customers .Of these , I are loyal customers of Bar A: they will each buy their pint of beer from*Bar A, no matter what prices each bar charges . &quot;The remaining Law _ I customers willbuy their pint from whichever bar charges the lowest price . If both bars charge thesame price , Each of these 10` – I customers will change randomly between the twobars so that , an expectation , half of them will end up at each bar . Parolls for Eachbur are equal to expected revenues .[ a ] Fill in the payoff’s in the following table*BUT B`\$ 10\$ 10BUT A\$ 4It’s True or false: &quot; Both bars charging \$ 10 is a Nash equilibrium for any 100 = = = . &quot;Provide &amp; proof of your answer .(C ) Fill in the blank , and show your work .&quot;If I{`_, both bars charging \$ 4 is aNash equilibrium .&quot;