The Managers of Alpha and Beta Must Make Repeated Advertising

Multiple Choice

The managers of Alpha and Beta must make repeated advertising decisions simultaneously at the beginning of every month.They choose either low or high levels of advertising expenditure.They both employ a discount rate of 2.5 percent per month. If Beta decides not to cooperate,its undiscounted benefit from cheating for one month is

A) $1,500
B) $2,000
C) $3,000
D) $4,000
E) $5,000