Two firms with a dominant strategy to advertise may _____ market share if their rival does not advertise and/or _____ share if their rival does advertise.

Question

Quizplus · Accepted Answer

In a scenario where two firms have a dominant strategy to advertise, if one firm advertises while the rival does not, it is likely to gain market share due to increased visibility and appeal to the customers. Conversely, if both firms advertise, the primary goal shifts to preventing the loss of market share to the rival, as both firms are actively engaging in efforts to attract or retain customers.

Two Firms with a Dominant Strategy to Advertise May _____