Suppose That Currently There Are No Airlines Serving the City

Suppose that currently there are no airlines serving the city of South Podunk. Both Accommodating Airlines and Friendly Flyers are looking to enter that market. (They are the only two.) The figure shows in extensive form the possible outcomes of the two firms' decisions. The payoffs represent, in thousands per month, the profit (or loss) the firm will realize from its decision. What is the solution to this extensive form game?

A) AA will enter the market; FF will not.
B) FF will enter the market; AA will not.
C) Neither airline will enter the market.
D) Both airlines will enter the market.