Problem
Hotel Price Fixing? Waikiki Beach has two hotels, one run by Juan and a second run by Tulah. The average cost of providing rooms is constant at $30 per day. Assume that low-price guarantees are illegal. Here are the possible outcomes: Price fixing (cartel). Each firm has 30 customers at a price of $40. Duopoly (no price fixing). Each firm has 40 customers per day at a price of $37. Underpricing (one firm charges $40 and the other charges $37). The low-price firm has 50 customers and the high-price firm has 10 customers. Juan chooses a price first, followed by Tulah. Draw a game tree for the price-fixing game and predict the outcome.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.