I’m working on a international trade multi-part question and need an explanation to help me study.
Note: payoffs are in millions of $
(a) Refer to the above table. Suppose Airbus is set to produce the aircraft before Boeing. What will be the outcome in this market? (2 points)
(b) Refer to the above table. Suppose the U.S. government (but not Europe) offers a $10 million subsidy to Boeing. What will be the outcome in this market? (Assume Boeing and Airbus must decide whether to enter the market (and produce) or not at the same time). (2 points)
(c) Refer to the above table. Suppose both governments offer their respective company a $10 million subsidy. What will be the outcome in this market? (Assume Boeing and Airbus must decide whether to enter the market (and produce) or not at the same time). (2 points)