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Read this story and answer question 12. Countdown currently has a monopoly. Pak'nSave is considering entering the industry. If Pak'nSave does not enter the industry,
Read this story and answer question 12. Countdown currently has a monopoly. Pak'nSave is considering entering the industry. If Pak'nSave does not enter the industry, Countdown will have profits of $20 million and Pak'nSave will have profits of 0. If Pak'nSave does enter the industry, Countdown can choose either to start a price war or to share the market. If Pak'nSave enters and Countdown starts a price war, both will face a loss of $10 million. If Pak'nSave enters and Countdown shares the market, Countdown will have profits of $4 million and Pak'nSave will have profits of $2 million. What is the only Nash Equilibrium in pure strategies? Select one: a. Countdown: Share Market; Pak'nSave: Enter b. Countdown: Price War; Pak'nSave: Do not Enter c. Countdown: Price War; Pak'nSave: Enter O d. Countdown: Share Market; Pak'nSave: Do not Enter e. None of the Given Options is Correct
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