Refer to the table below to answer the following questions.
Table 14.2.6
-Refer to Table 14.2.6.Firms A and B can conduct research and development (R&D)or not conduct it.R&D is costly but can increase the quality of the product and increase sales.The payoff matrix is the economic profits of the two firms and is given above,where the numbers are millions of dollars.A's best strategy is to
A)conduct R&D regardless of what B does.
B)not conduct R&D regardless of what B does.
C)conduct R&D only if B conducts R&D.
D)conduct R&D only if B does not conduct R&D.
E)do whatever B does.

Question

Refer to the table below to answer the following questions.
Table 14.2.6 
-Refer to Table 14.2.6.Firms A and B can conduct research and development (R&D)or not conduct it.R&D is costly but can increase the quality of the product and increase sales.The payoff matrix is the economic profits of the two firms and is given above,where the numbers are millions of dollars.A's best strategy is to
A)conduct R&D regardless of what B does. 
B)not conduct R&D regardless of what B does. 
C)conduct R&D only if B conducts R&D. 
D)conduct R&D only if B does not conduct R&D. 
E)do whatever B does.

Quizplus · Accepted Answer

Firm A's best strategy is to conduct R&D regardless of what B does because, in every scenario, A's payoff is higher when it conducts R&D compared to when it does not.

Refer to the Table Below to Answer the Following Questions