Table 15.2.6

-Refer to Table 15.2.6. Firms A and B can conduct research and development (R&D)or not conduct it. R&D is costly but can increase the quality of the product and increase sales. The payoff matrix is the economic profits of the two firms and is given above, where the numbers are millions of dollars. A's best strategy is to
A)conduct R&D regardless of what B does.
B)not conduct R&D regardless of what B does.
C)conduct R&D only if B conducts R&D.
D)conduct R&D only if B does not conduct R&D.
E)not conduct R&D only if B does not conduct R&D.

Question

Table 15.2.6
 
-Refer to Table 15.2.6. Firms A and B can conduct research and development (R&D)or not conduct it. R&D is costly but can increase the quality of the product and increase sales. The payoff matrix is the economic profits of the two firms and is given above, where the numbers are millions of dollars. A's best strategy is to
A)conduct R&D regardless of what B does. 
B)not conduct R&D regardless of what B does. 
C)conduct R&D only if B conducts R&D. 
D)conduct R&D only if B does not conduct R&D. 
E)not conduct R&D only if B does not conduct R&D.

Quizplus · Accepted Answer

A's best strategy is to conduct R&D regardless of what B does because it gives A the highest payoff in all cases.

Table 15.2.6 -Refer to Table 15.2.6. Firms a and B Can Conduct