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This question refers to the following game in strategic form, where each cell shows the profits accruing to Lightning Industries and Maximum Power: Maximum Power

This question refers to the following game in strategic form, where each cell shows the profits accruing to Lightning Industries and Maximum Power:

Maximum Power

Build

Don’t Build

Lighting

Build

L: $90

M: $90

L: $120

M: $70

Don’t Build

L: $70

M: $120

L: $95

M: $95

The Nash equilibrium of this game is:

a. Lighting builds new capacity, while Maximum Power does not

b. Both companies build new capacity

c. Maximum Power builds new capacity, while Lightning does note

Both companies don’t build

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