a. Assume you have been recruited as an advisor for a one of the largest telecommunication service providers in Australia. Company wanted to revise their pricing for all the mobile phone packages (pre-paid and postpaid) as they cannot cope with the increasing cost of their service.

Critically review the factors you must examine before you make suggestions on company decision increase the price of their service by 3.5%.

b. Assume that U.S. and Japanese trade policies as a prisoners' dilemma and are reviewing to decide whether to open or close their import markets. The payoff matrix is shown below. Assume that each country knows the payoff matrix and believes that the other country will act in its own interest.