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8. Refer to the simultaneously game of advertising shown below. Firm B Firm A Advertise Do Not Advertise Advertise 0, 0 175, -10 Do Not

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8. Refer to the simultaneously game of advertising shown below. Firm B Firm A Advertise Do Not Advertise Advertise 0, 0 175, -10 Do Not Advertise -10, 175 125, 125 a) What is the Nash equilibrium? Explain. A. {Advertise, Do Not Advertise} B. { Advertise, Advertise} C. {Do Not Advertise, Do Not Advertise} D. {Do Not Advertise, Advertise} b) If two firms consider to collude and split the profit evenly. Which strategy would they agree? 3 A. { Advertise, Do Not Advertise} B. { Advertise, Advertise} C. {Do Not Advertise, Do Not Advertise} D. {Do Not Advertise, Advertise} c) If firm A moves first and follow their agreement in b), which strategy would firm B choose? Explain

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