Figure 14-5 Netflix (N)was One of the First Companies to Offer Streaming

Figure 14-5

Netflix (N) was one of the first companies to offer streaming video services and is still considered a leader in the industry.Spotify (S) offers a music streaming service and is considering entering the video streaming business.At this point, Netflix has to decide whether or not to lower its subscription price in order to deter Spotify's entry into the market.Figure 14-5 shows the decision tree for the Netflix-Spotify entry game.
-Refer to Figure 14-5.If Netflix lowers its price, will this deter Spotify from setting up a streaming video service?

A) Yes, because Spotify stands to lose $1 million if it competes with Netflix.
B) Yes, because Spotify will make a smaller profit than Netflix if it chooses to compete.
C) No, because Spotify will make a profit if it competes with Netflix.
D) No, because Spotify will make a larger profit than Netflix if it chooses to compete.