Multiple Choice
If you advertise and your rival advertises,you each will earn $5 million in profits.If neither of you advertises,you will each earn $10 million in profits.However,if one of you advertises and the other does not,the firm that advertises will earn $15 million and the non-advertising firm will earn $1 million.Which of the following is true?
A) A dominant strategy for firm A is to advertise.
B) A dominant strategy for firm B is to advertise.
C) A Nash equilibrium is for both firms to advertise.
D) All of the statements associated with this question are correct.
Correct Answer:
Verified
Correct Answer:
Verified
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