Problem Set 10: Chapter 15 Oligopoly 1. Nimbus, Inc, and Cleansweep, Inc., are the only producers of ying brooms. Each rm has two strategies: Spend 30,000 galleons a year on research and development (R&D) or spend nothing on R&D. If neither rm spends on R&D, Nimbus' economic prot is 80, 000 galleons and Cleansweep's economic prot is 40,000 galleons. If each rm conducts R&D, market shares are maintained, but each rm's prot is lower by the amount spent on R&D. 1f Nimbus conducts R&D and Cleansweep does not, Nimbus makes an economic prot of 120,000 galleons, while Cleansweep incurs an economic loss of 20,000 galleons. If Cleansweep conducts R&D and Nimbus does not, Cleansweep makes a prot of 60,000 galleons while Nimbus loses 10,000 galleons. a) Construct a payoff matrix for the game that Nimbus and Cleansweep must play. b) Find the Nash equilibrium. In the Nash equilibrium, what is each rm's equilibrium prot