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Refer to the Normal-Form Game of Price Competition Shown Below

Question 82

Multiple Choice

Refer to the normal-form game of price competition shown below. Refer to the normal-form game of price competition shown below.   Firm A must decide whether or not to introduce a new product.If firm A introduces a new product,firm B must decide whether or not to clone the product.The payoff structure of the game is depicted in Figure 10-12.The subgame perfect Nash equilibrium to this game is: A)  Firm A plays  Introduce ; firm B plays  Clone  if firm A plays  Introduce.  B)  Firm A plays  Do Not Introduce ; firm B plays  Clone  if firm A plays  Introduce.  C)  Firm A plays  Introduce ; firm B plays  Do Not Clone  if firm A plays  Introduce.  D)  Firm A plays  Do Not Introduce ; firm B plays  Do Not Clone  if firm A plays  Introduce. Firm A must decide whether or not to introduce a new product.If firm A introduces a new product,firm B must decide whether or not to clone the product.The payoff structure of the game is depicted in Figure 10-12.The subgame perfect Nash equilibrium to this game is:


A) Firm A plays "Introduce"; firm B plays "Clone" if firm A plays "Introduce."
B) Firm A plays "Do Not Introduce"; firm B plays "Clone" if firm A plays "Introduce."
C) Firm A plays "Introduce"; firm B plays "Do Not Clone" if firm A plays "Introduce."
D) Firm A plays "Do Not Introduce"; firm B plays "Do Not Clone" if firm A plays "Introduce."

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