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This about Game Theory. Imagine two firms competing. If neither firm spends money on advertisng, then they will have low costs and therefore they will

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This about Game Theory. Imagine two firms competing. If neither firm spends money on advertisng, then they will have low costs and therefore they will each earn a profit of $100 million. If, however, firm Apple advertises while firm Laredo does not advertise, then Apple will take many of the customers of Laredo. Apple will earn a profit of $150 million, while Laredo earns a profit of only $20 million. If firm Laredo advertises while Apple does not, then Laredo will take many of the customers away from Apple. Laredo will earn a profit of $150 million while Apple earns a profit of only $20 million. If both firms advertise, then h will each earn a profit of $70 million. Apple Both Only Firms Apple Advertise Advertises $70 $150 million million profits profits $70 $20 million million profits profits Laredo Only Neither Laredo Firm Advertises Advertises $20 $100 million million profits profits $150 $100 million million profits profits What is the Nash Equilibrium? In other words, what are these two firms most probably going to choose to do? Oa.Laredo will advertise but Apple will not. Ob.Both firms will advertise. OC. Apple will advertise but Laredo will not. Od.Neither firm will advertise

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