The Following Matrix Displays the Advertising Rates and the Resultant

Essay

The following matrix displays the advertising rates and the resultant profits (in thousands of dollars) for two rival newspapers in a major city.
$\begin{array}{c}\quad\quad \text { FIRM B } \\ \begin{array}{ | l | c | c | } \hline \text { FIRM A } & \text { High ad rate } & \text { Low ad rate } \\\hline \text { High ad rate } & 20,20 & 12,26 \\\hline \text { Low ad rate } & 26,12 & 15,15 \\\hline\end{array}\end{array}$ (a) Assume that the newspapers set their advertising rates independently. Determine the optimal strategy for each firm. Explain briefly.