The following table shows the payoff matrix of the two firms (Firm X and Firm Y) in dollars when they advertise and when they do not advertise. Table 11.1
- According to the payoffs in Table 11.1:
A)Firm X will not advertise,no matter what,if Firm Y does not advertise.
B)Firm X will advertise only if Firm Y does not advertise.
C)Firm X does not have a dominant strategy,but Firm Y does.
D)Firm Y does not have a dominant strategy,but Firm X does.
E)Both firms would be better off if neither advertised.

Question

The following table shows the payoff matrix of the two firms (Firm X and Firm Y) in dollars when they advertise and when they do not advertise. Table 11.1 
- According to the payoffs in Table 11.1:
A)Firm X will not advertise,no matter what,if Firm Y does not advertise. 
B)Firm X will advertise only if Firm Y does not advertise. 
C)Firm X does not have a dominant strategy,but Firm Y does. 
D)Firm Y does not have a dominant strategy,but Firm X does. 
E)Both firms would be better off if neither advertised.

Quizplus · Accepted Answer

If both firms would be better off if neither advertised, it suggests that the payoff for both firms is higher when neither engages in advertising, indicating a potential mutual benefit in avoiding advertising.

The Following Table Shows the Payoff Matrix of the Two