The figure shown displays the choices that could be made by two coffee shops: Starbucks and Dunkin' Donuts. Both companies are trying to decide whether or not to expand into a new area. The area can only handle one coffee shop's expansion, and the expansion of one shop will cause the other to lose some business. If both coffee shops expand, the market will become saturated and neither will do well. The payoffs for these shops are the additional profits (or losses)they will earn.Starbucks:
A)has a dominant strategy to expand.
B)has a dominant strategy not to expand.
C)has the first-mover advantage.
D)should wait to see what Dunkin' Donuts is going to do.

Question

The figure shown displays the choices that could be made by two coffee shops: Starbucks and Dunkin' Donuts. Both companies are trying to decide whether or not to expand into a new area. The area can only handle one coffee shop's expansion, and the expansion of one shop will cause the other to lose some business. If both coffee shops expand, the market will become saturated and neither will do well. The payoffs for these shops are the additional profits (or losses)they will earn.Starbucks:
A)has a dominant strategy to expand. 
B)has a dominant strategy not to expand. 
C)has the first-mover advantage. 
D)should wait to see what Dunkin' Donuts is going to do.

Quizplus · Accepted Answer

The Answer of  The figure shown displays the choices that could be made by two coffee shops: Starbucks and Dunkin' Donuts. Both companies are trying to decide whether or not to expand into a new area. The area can only handle one coffee shop's expansion, and the expansion of one shop will cause the other to lose some business. If both coffee shops expand, the market will become saturated and neither will do well. The payoffs for these shops are the additional profits (or losses)they will earn.Starbucks:
A)has a dominant strategy to expand. 
B)has a dominant strategy not to expand. 
C)has the first-mover advantage. 
D)should wait to see what Dunkin' Donuts is going to do.

The Figure Shown Displays the Choices That Could Be Made