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Q5. Refer to the table below to answer the following questions. Table 3 Firm A K&D No K&D A: $25 A:-53 R&D B: $15 B:
Q5. Refer to the table below to answer the following questions. Table 3 Firm A K&D No K&D A: $25 A:-53 R&D B: $15 B: SGO Firm B A: $60 A: $50 No R&D B: -$3 B: $35 Refer to Table 3. Firms A and B can conduct research and development (R&D) or not conduct it. R&D is costly but can increase the quality of the product and increase sales. The payoff matrix is the economic profits of the two firms and is given above, where the numbers are millions of dollars. a. What is Firm A Dominant Strategy? b. What is Firm B Dominant Strategy? c. What is the Nash Equilibrium? d. Is this game can be described as a prisoners' dilemma
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