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A ng.cengage.com Ka Graded Assignmania - ECON2902.20219822.617934 MindTap CENGAGE | MINDTAP the Mindtap Lesson 4 Homework purplet Advertise 6, 6 19. 4 FIzzo ake pop
A ng.cengage.com Ka Graded Assignmania - ECON2902.20219822.617934 MindTap CENGAGE | MINDTAP the Mindtap Lesson 4 Homework purplet Advertise 6, 6 19. 4 FIzzo ake pop Doesn't Advertise 4, 19 10, 10 For example, the upper right cell shows that if Fizzo advertises and Pop Hop doesn't advertise, Fizzo will make a profit of $19 million, and Pop Hop will make a profit of $4 million. Assume this is a simultaneous game and that Fizzo and Pop Hop are both profit-maximizing firms. If Fizzo decides to advertise, it will earn a profit of s million if Pop Hop advertises and a profit of $ million if Pop Hop does not advertise. If Fizzo decides not to advertise, it will earn a profit of $ million if Pop Hop advertises and a profit of s million if Pop Hop does not advertise. If Pop Hop advertises, Fizzo makes a higher profit if it chooses If Pop Hop doesn't advertise, Fizzo makes a higher profit if it chooses Suppose that both firms start off not advertising. If the firms act independently, what strategies will they end up choosing? Both firms will choose to advertise. OFizzo will choose to advertise and Pop Hop will choose not to advertise. Both firms will choose not to advertise. OFizzo will choose not to advertise and Pop Hop will choose to advertise. Again, suppose that both firms start off not advertising. If the firms decide to collude, what strategies will they end up choosing? Both firms will choose to advertise. OFizzo will choose to advertise and Pop Hop will choose not to advertise. Fizzo will choose not to advertise and Pop Hop will choose to advertise. Both firms will choose not to advertise. MacBook Air
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