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Two Men's Clothing Stores That Compete for Most of the Market

Question 29

Multiple Choice

Two men's clothing stores that compete for most of the market in a small town in Ohio must choose their advertising levels simultaneously.The following payoff table facing the two firms,Arbuckle & Son and Mr.B's,shows the weekly profit outcomes for the various advertising level combinations. Two men's clothing stores that compete for most of the market in a small town in Ohio must choose their advertising levels simultaneously.The following payoff table facing the two firms,Arbuckle & Son and Mr.B's,shows the weekly profit outcomes for the various advertising level combinations.   Which of the following statements is NOT true for the advertising decision facing Arbuckle & Son and Mr.B? A) When both firms choose a high level of advertising,they are in Nash equilibrium. B) When both firms choose a low level of advertising,they are in Nash equilibrium. C) This is a prisoners' dilemma decision situation. D) Cell's B and C are not strategically stable. E) A dominant strategy equilibrium exists for Arbuckle and Mr.B. Which of the following statements is NOT true for the advertising decision facing Arbuckle & Son and Mr.B?


A) When both firms choose a high level of advertising,they are in Nash equilibrium.
B) When both firms choose a low level of advertising,they are in Nash equilibrium.
C) This is a prisoners' dilemma decision situation.
D) Cell's B and C are not strategically stable.
E) A dominant strategy equilibrium exists for Arbuckle and Mr.B.

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