Assume that Philip Morris and RJ Reynolds (both cigarette manufacturers) each earn $10 million in profits a year if they both advertise on TV, and $20 million in profits a year if neither of them advertises on TV. If Philip Morris advertises on TV but RJ Reynolds does not advertise, then Philip Morris earns $35 million in profits a year while RJ Reynolds earns $5 million. Alternatively, if RJ Reynolds advertises on TV but Philip Morris does not advertise on TV, then RJ Reynolds earns $35 million in profits a year while Philip Morris earns $5 million in profits a year. The payoff matrix for Philip Morris and RJ Reynolds is as follows: Philip Morris Advertise Not Advertise $10 Advertise mil $5 mil RJ $10 $35 Reynolds mil mil $35 $20 Not mil mil Advertise $20 $5 mil mil a. If both companies only choose whether to advertise one time, what will Philip Morris choose? Why about RJ Reynolds? In other words, what is the dominant strategy for each firm? Explain. b. In 1970, Congress enacted a law making cigarette advertising on TV illegal after January 1, 1971. Explain why this law actually increased the profits of cigarette manufacturers like Philip Morris and RJ Reynolds. For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). BIUS Paragraph Open Sans, sa... v 10pt E v A v V TX