Before entry, the incumbent earns a monopoly profit of $20 (profits in millions). If entry occurs, the incumbent and rival each earn the duopoly profit, $6. Suppose that the incumbent can induce the government to require all rms to install pollution-control devices that cost each rm $8. Should the incumbent urge the government to require pollution-control devices? Why or why not? Assume for simplicity the game tree is illustrated in the figure to the right. All prots are in millions. What is the subgame perfect Nash equilibrium? 0 A. The Nash equilibrium is for the incumbent to require devices and for the rival to only enter if devices are not required. 0 B. The Nash equilibrium is for the incumbent to require devices and for the rival to not enter regardless of whether devices are required. 0 C. The Nash equilibrium is for the incumbent to require devices and for the rival to enter regardless of whether devices are required. 0 D. The Nash equilibrium is for the incumbent to not require devices and for the rival to only enter if devices are not required. 0 E. The game does not have a Nash equililbrium. Enter (5.5) (20,0) Don't enter Enter (_2' _2) Devices (12,0) Don't enter