Two supermarkets face the following possibilities.

		Superstore
		Advertise	Don't Advertise
Megastore	Advertise	$95, $80	$305, $55
Don't Advertise	$65, $285	$165, $115

1. A Nash equilibrium is

1a. for Megastore to advertise and for Superstore to advertise.

1b. for Megastore to advertise and for Superstore not to advertise

1c. for Megastore not to advertise and for Superstore to advertise.

2d. for Megastore not to advertise and for Superstore not to advertise.

There is no Nas equilibrium in this rivalry game.

2. In the example above what strategy would maximize their combined profits if collusion were not illegal?

2a. for Megastore to advertise and for Superstore to advertise.

2b. for Megastore to advertise and for Superstore not to advertise.

2c. for Megastore not to advertise and for Superstore to advertise.

2d. for Megastore not to advertise and for Superstore not to advertise.