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J. 1.2 Two large firms, one domestic and one foreign, are competing in the world market for aluminum. If either obtains a subsidy from its

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J. 1.2 Two large firms, one domestic and one foreign, are competing in the world market for aluminum. If either obtains a subsidy from its respective national government, it can shift profits away from its com petitor and increase national income. The firms have the following payoff matrix. Does either firm have a dominant strategy? What is the Nash equilibrium? Domestic Do not lobby Lobby Foreign

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