Microsoft and HP are close competitors in the personal computer market. Suppose that each year, Microsoft and HP must decide whether to invest in costly research and development (R&D). If both invest in R&D, each will earn $30 million. If neither invests in R&D, each will earn $40 million. If one firm invests, while the other does not, the firm that invests will earn $45 million, and the firm that does not will earn $25 million.

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The Answer of Microsoft and HP are close competitors in the personal computer market. Suppose that each year, Microsoft and HP must decide whether to invest in costly research and development (R&D). If both invest in R&D, each will earn $30 million. If neither invests in R&D, each will earn $40 million. If one firm invests, while the other does not, the firm that invests will earn $45 million, and the firm that does not will earn $25 million.

Microsoft and HP Are Close Competitors in the Personal Computer