In the market for video game consoles, Microsoft and Sony are essentially a duopoly, with Nintendo a distant third. Consider a purely hypothetical game in which the executives of the two companies are deciding how much they will spend on advertising. To simplify, assume that they can either spend a lot or spend a little. If both firms spend a lot, Sony's hypothetical profit will be $2 billion and Microsoft's hypothetical profit will be $1 billion. If they both spend a little, Sony's profit will be $9 billion and Microsoft's profit will be $7 billion. If Sony spends a lot and Microsoft spends a little, Sony's profit will be $8 billion and Microsoft's profit will be $2 billion. Finally, if Sony spends a little and Microsoft spends a lot, Sony's profit will be $3 billion and Microsoft's profit will be $6 billion. Assume that Sony and Microsoft play this advertising game only once. Complete the payoff matrix for this game: Microsoft (M) Spend a Little Spend a Lot S: $ billion S: $ billion Spend a Little M: $ billion M: $ billion Sony (S) S: $ billion s: $ billion Spend a Lot M: $ billion M: $ billion Does Sony have a dominant strategy? If so, what is it? Does Microsoft have a dominant strategy? If so, what is it? A. Spending a little is the dominant strategy for both Sony and Microsoft. O B. Spending a lot is the dominant strategy for Sony, while Microsoft does not have a dominant strategy. C. Spending a lot is the dominant strategy for Microsoft, while Sony does not have a dominant strategy. O D. Spending a lot is the dominant strategy for both Sony and Microsoft. What is the Nash equilibrium of the game? O A. The Nash equilibrium occurs where both Sony and Microsoft spend a little on advertising. O B. The Nash equilibrium occurs where Microsoft spends a lot and Sony spends a little on advertising. O C. The Nash equilibrium occurs where both Sony and Microsoft spend a lot on advertising. O D. The Nash equilibrium occurs where Sony spends a lot and Microsoft spends a little on advertising