Phillip Morris and R.J. Reynolds have spent huge sums of money each year to advertise their tobacco products in an attempt to capture customers from each other. Suppose that each year Phillip Morris and R.J. Reynolds have to decide whether or not they want to spend money on advertising. If neither advertises, they will both earn a profit of $2 million. If they both advertise, each will earn a profit of $1.5 million. If one firm advertises and the other does not, the firm that advertises will earn $2.8 million in profits and the other will earn only $1 million. a) Construct the payoff matrix to illustrate this problem. b) Is this a zero sum game? Explain (one sentence- look up the definition of zero sum games before you start). c) Suppose that this is a non-cooperative game. Does either firm have a dominant strategy? What is it? Explain why this is or is not a dominant strategy. d) Now suppose that the firms can write an enforceable contract about what they will do. Does this change the outcome? What is the cooperative solution to this game? Why?