Consider an industry that consists of two firms, Alpha and Beta producing similar products. Each must decide whether to increase its production capacity in the coming year. Assume each of the firm produces at full capacity. Thus, the expansion of capacity entails a trade-off - the firm may achieve a larger market share but selling at a lower market price.

The following table shows the payoff matric of capacity expansion between Alpha and Beta: no explanation of current capacity, a small expansion, or a large expansion of the current capacity. All amounts earned are in millions of dollars per year.

	Beta
Alpha		Do not expand	Small	Large
Do not expand	$18, $18	$15, $20	$9, $18
Small	$20, $15	$16, $16	$8, $12
	Large	$18, $9	$12, $8	$0, $0

Assume a simultaneous game. In this capacity expansion game, verify that the nash equilibrium is (Small, Small). Include the discussion of whether Alpha and/ or Beta has a dominant strategy and dominated strategy