The Diagram Shows the Extensive Form Version of a Strategic

Multiple Choice

The diagram shows the extensive form version of a strategic game between the two nationally dominant coffee sellers, Corporate Coffee and Jumbo Java, both of whom are considering opening coffee shops in a new town. The payoffs represent, in thousands per month, the profit (or loss) the firm will realize from its decision. What does this extensive form game indicate about the decision to open a new coffee shop?

A) The outcome of the game is a prisoner's dilemma.
B) Neither firm has a first-mover advantage.
C) Jumbo Java has a first-mover advantage.
D) Corporate Coffee has a first-mover advantage.