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The City of Dustin Is Going to Grant an Exclusive

Question 132

Multiple Choice

The city of Dustin is going to grant an exclusive contract to provide cable TV for the next year.The economic profit of the contract is thought to be $5 million.Firm 1 and firm 2 are competing for the contract.The firm that spends the most on lobbying will be awarded the contract.
-Refer to the information above.If both firms refrain from spending anything on lobbying efforts,each firm's expected profit from the contract is


A) $5 million.
B) $2.5 million.
C) $2 million.
D) $1 million.
E) impossible to calculate.

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