Sarita Devi and Mohan Lal both have kiosks on the Delhi-Lucknow Highway in India selling sweetmeats made out of jaggery. Both Sarita Devi and Mohan Lal hail from the same village which produces jaggery. While Sarita Devi prefers making peanut brittle, Mohan Lal can make both - peanut brittle and tamarind-jaggery candy equally well. Both of them sell whatever they make on any particular day, and if they end up making the same product they have to sell it at the same price so they won’t end up losing customers. If each one makes a different product, they can charge any price they like. The matrix below shows their payoffs i.e. the incomes they make from selling their products which further depend on the price at which they sell the products. Based on this information read the following statements and select the correct two.
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Question

Sarita Devi and Mohan Lal both have kiosks on the Delhi-Lucknow Highway in India selling sweetmeats made out of jaggery. Both Sarita Devi and Mohan Lal hail from the same village which produces jaggery. While Sarita Devi prefers making peanut brittle, Mohan Lal can make both - peanut brittle and tamarind-jaggery candy equally well. Both of them sell whatever they make on any particular day, and if they end up making the same product they have to sell it at the same price so they won’t end up losing customers. If each one makes a different product, they can charge any price they like. The matrix below shows their payoffs i.e. the incomes they make from selling their products which further depend on the price at which they sell the products. Based on this information read the following statements and select the correct two.

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Answer

Sarita Devi and Mohan Lal are engaged in a strategic interaction.

Answer

There is no Nash equilibrium in this game

Answer

Whether Sarita Devi chooses to sell Tamrid-jaggery Candy, or Peanut Brittle, Mohan Lal prefers to sell Peanut brittle from his kiosk.

Answer

While Mohan Lal takes into account the actions of Sarita Devi, the same cannot be said about Sarita Devi.

Crowdly

Sarita Devi and Mohan Lal both have kiosks on the Delhi-Lucknow Highway in India...

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