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Refer to the Information Provided in Table 14 -Refer to Table 14

Question 12

Multiple Choice

Refer to the information provided in Table 14.5 below to answer the question that follows.
Table 14.5
B's Strategy
 Advertise  Don’t Advertise  A’s profit $200 A’s profit $400 million  million  B’s profit $200 B’s profit $100 Advertise  million  million  A’s Strategy  A’s profit $100 A’s profit $150 Don’t  million  million  B’sprofit $400 B’s profit $150 Advertise  million  million \begin{array} { l l l l } \hline & & \text { Advertise } & \text { Don't Advertise } \\\hline & & \text { A's profit } \$ 200 & \text { A's profit } \$ 400 \\& & \text { million } & \text { million } \\& & \text { B's profit } \$ 200 & \text { B's profit } \$ 100 \\ & \text { Advertise } & \text { million } & \text { million } \\\text { A's Strategy } & & & \\& & \text { A's profit } \$ 100 & \text { A's profit } \$ 150 \\& \text { Don't } & \text { million } & \text { million } \\& & \text { B'sprofit } \$ 400 & \text { B's profit } \$ 150 \\& \text { Advertise } & \text { million } & \text { million }\end{array}
-Refer to Table 14.5. If both firms follow a maximin strategy, the equilibrium in the game is


A) (Advertise, Advertise) .
B) (Don't Advertise, Don't Advertise) .
C) (Don't Advertise, Advertise) .
D) (Advertise, Don't Advertise) .

Correct Answer:

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