Firm B

Every month two competing firms $($Firm A and Firm B$)$ must decide how to spend their advertising budgets.

Assume that each firm has two choices: billboard advertising or magazine advertising. The table above

shows market shares for each firm given their own advertising decision and the decision of the other firm.

Market shares are listed in the order $($Firm A$,$ Firm B$).$

a$)$ Define Firm A$\text{'}$s Expected Payoffs for billboards and Expected Payoffs for magazines. From this,

calculate Firm B$\text{'}$s Nash equilibrium mix of billboards and explain the steps you took to find this.

b$)$ Define Firm B$\text{'}$s Expected Payoffs for billboards and Expected Payoffs for magazines. From this,

calculate Firm A$\text{'}$s Nash equilibrium mix of billboards and explain the steps you took to find this.