Use the following example to answer questions 8 & 9:

Little Kona is a small coffee company that is considering entering a market dominated by Big Brew. Big Brew has enough market power to set either a high price or a low price. If Little Kona enters the market and Big Brew sets a high price, Kona would make $2 million profit while Brew would make $3 million, but if Big Brew sets a low price, Kona would lose $1 million and Brew would make $1 million. If Little Kona doesn't enter the market and Big Brew sets a high price, Kona would make no money and Brew would make $7 million, but if Big Brew sets a low price, Kona would make no money and Brew would make $2 million.

Does either player in this game have a dominant strategy?

A.Yes, both Little Kona and Big Brew have a dominant strategy.

B.Yes, only Little Kona has a dominant strategy.

C.Yes, only Big Brew has a dominant strategy.D.No, neither Little Kona nor Big Brew have a dominant strategy.

What is the Nash equilibrium for this game?

A.Little Kona enters the market; Big Brew sets a high priceB.Little Kona enters the market; Big Brew sets a low priceC.Little Kona doesn't enter the market; Big Brew sets a high priceD.Little Kona doesn't enter the market; Big Brew sets a low price