Question
Consider the following information for a simultaneous move game. If you advertise and your rival advertises, you each will earn $5 million in profits. If
Consider the following information for a simultaneous move game. If you advertise and your rival advertises, you each will earn $5 million in profits. If you choose not to advertise and your rival chooses not to advertise, you will each earn $10 million in profits. However, if one of you advertises and the other does not, the firm that advertises will earn $15 million and the firm that does not advertise will earn $1 million. Assuming that each player cares only about his or her own profits, represent this game in strategic form (the game matrix). The Nash Equilibrium is:
Group of answer choices
A. There are two Nash Equilibria. In each, one firm advertises and the other does not.
B. Both firms choose to advertise.
C. Both firms choose not to advertise.
D. There is no Nash Equilibrium in this game.
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