There are two plant nurseries in a small town. They are called Tumbleweed and Native Roots. If neither advertises, Tumbleweed makes $80,000 a month in profits and Native Roots makes $95,000. Advertising would cost each firm $20,000 a month. If only one firm advertises, that firm increases sales by $50,000 a month whereas the nonadvertising firm loses out. If Tumbleweed doesn't advertise but Native Roots does, Tumbleweed loses $30,000 a month. If Native Roots doesn't advertise but Tumbleweed does, it loses $35,000 a month. If both advertise, they increase revenue by $15,000 each. Insofar as they grow their products from the ground, they don't have any increased costs when they have increased sales (that is, their marginal cost of production is $0).

What is the amount of profit Tumbleweed makes when both advertise?$

How much profit does Native Roots make when both advertise? $

What outcome is predicted (that is, the Nash equilibrium) for these two firms, given the figures above?

Choose one:

A.Both firms advertise.

B.Tumbleweed advertises, but Native Roots doesn't.

C.Native Roots advertises, but Tumbleweed doesn't.

D.Neither firm advertises