Question Completion Status: Question 2 1 point HOPE AMPWET Your boss has become interested in the analysis of strategic competition and recently rend a book about guma theory He remembers from it that "Nash equilibrium" describes a kind of stable arrangement that we might expect to play out between two riveling firms As it happens, the investment for you both work for is currently trying to assess whether to buy a sinke in the software firm Tech Giant It sells a video editor that places people in their favorite movie sonnos A rival, Clipsy, has a very similar product. Like Tech Giant, Clipsy spent $1 million on the development the product Fortunately, both firms can make and sell additional copies without further expenses: It is dear that potential toons will choose between those two editing softwares based on price, Sinon the companies use the same distribution channels . can be assumed that each would capture half the market if they set the same price. Your boss boklives that the concept of Nash equilibrium implies that Tech Giant can take advantage of the cost structure to undercut Clipsy's price, capture the entire market, and make a high prost. Do you agree? () No. since they have the same costs, and the cost of additional copies is zero. they wil both distribute the software for free in Nash equilibrium and lose their development expenses. No, they will both lunge the some price in Nash equilibrium, and the price will be high enough so that such can cover it's development oxponses. Yes, in any Nash equabrium, Tech Giant would charge a lower price than Clipsy, sinon it has no additional costs from selling copies of the software @) There is a Nash equilibrium where Tech Giant undercuts Clipsy, but there is also a Nash equilibrium where Clipsy undercuts Tech Giant It depends on who plays more aggressively Click Submit to complete this assessment. Question 2 of 2