There are two Ford dealerships in town: Bills and Jeremys. Each of these new car dealers have three alternative strategies that they could pursue: (1)highlight . Each of these new car dealers have three alternative strategies that they could pursue: (1) highlight service department quality; (2) be the low-price dealer on all automobile sales; or (3) hire a well-known sports star and engage in extensive advertising in outlying small towns and rural areas.

The payoffs (profits) of these strategies are listed below, with Bills profits being the first number in each cell.

Jeremys
		Service	Low Cost	Advertising
Bills	Service	24, 33	18, 36	15, 42
	Low Cost	36, 27	24, 30	18, 24
	Advertising	33, 18	30, 24	12, 18

a) Does either firm have a dominant strategy? How about a dominated strategy? If so, explain why and what the implications are for their strategy.

b) What do you predict will be the outcome of this strategic interaction between these two firms? i.e. what strategy will each firm choose? Briefly explain why.