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Economics

Consider the following information for a simultaneous move game: 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. If you and your rival plan to be in business for only one year, the Nash equilibrium is:

A. for each firm to advertise.

B. for neither firm to advertise.

C. for your firm to advertise and the other not to advertise.

D. None of the answers is correct.

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M91696634

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