Martha and Oleg are competitors in a local market and each is trying to decide if it is worthwhile to advertise.If both of them advertise,each will earn a profit of $5,000.If neither of them advertise,each will earn a profit of $10,000.If one advertises and the other doesn't,then the one who advertises will earn a profit of $15,000 and the other will earn $7,000.To earn the highest profit,Martha
A) should advertise, and she will earn $5,000.
B) should advertise, and she will earn $15,000.
C) should not advertise, and she will earn $10,000.
D) has no dominant strategy.

Question

Quizplus · Accepted Answer

There is no dominant strategy for Martha because her best choice depends on what Oleg decides to do. If Oleg advertises, Martha should not advertise to earn $10,000. If Oleg does not advertise, Martha should advertise to earn $15,000.

Martha and Oleg Are Competitors in a Local Market and Each