Suppose Firm a and Firm B Are Considering Whether to Invest

Multiple Choice

Suppose Firm A and Firm B are considering whether to invest in a new production technology. For each firm, the payoff to investing (given in thousands of dollars per day) depends upon whether the other firm invests, as shown in the payoff matrix below. Which of the following statements is correct?

A) It cannot be determined whether Firm A has a dominated strategy.
B) "Don't invest" is a dominated strategy for Firm A.
C) Firm A does not have a dominated strategy.
D) "Invest" is a dominated strategy for Firm A.