The figure shown displays the choices that could be made by two firms in an industry: Tesla and Ford. Both companies are trying to decide whether or not to invest in research and development. Tesla will make a decision first, and then Ford will make a decision after observing Tesla's choice. The payoffs are the profits (in millions)these companies will earn as a result of their choices.If these players act in their own self-interest, then Ford will earn:
A)$40 million.
B)$10 million.
C)$50 million.
D)$70 million.

Question

The figure shown displays the choices that could be made by two firms in an industry: Tesla and Ford. Both companies are trying to decide whether or not to invest in research and development. Tesla will make a decision first, and then Ford will make a decision after observing Tesla's choice. The payoffs are the profits (in millions)these companies will earn as a result of their choices.If these players act in their own self-interest, then Ford will earn:
A)$40 million. 
B)$10 million. 
C)$50 million. 
D)$70 million.

Quizplus · Accepted Answer

The Answer of  The figure shown displays the choices that could be made by two firms in an industry: Tesla and Ford. Both companies are trying to decide whether or not to invest in research and development. Tesla will make a decision first, and then Ford will make a decision after observing Tesla's choice. The payoffs are the profits (in millions)these companies will earn as a result of their choices.If these players act in their own self-interest, then Ford will earn:
A)$40 million. 
B)$10 million. 
C)$50 million. 
D)$70 million.

The Figure Shown Displays the Choices That Could Be Made