This figure displays the choices being made by two coffee shops: Starbucks and Dunkin Donuts.Both companies are trying to decide whether or not to expand in an area.The area can handle only one of them expanding,and whoever expands will cause the other to lose some business.If they both expand,the market will be saturated,and neither company will do well.The payoffs are the additional profits (or losses)they will earn.
According to the figure shown,if Dunkin Donuts expands,then Starbucks should:
A) also expand their business.
B) not expand.
C) give an ultimatum.
D) None of these statements is true.

Question

This figure displays the choices being made by two coffee shops: Starbucks and Dunkin Donuts.Both companies are trying to decide whether or not to expand in an area.The area can handle only one of them expanding,and whoever expands will cause the other to lose some business.If they both expand,the market will be saturated,and neither company will do well.The payoffs are the additional profits (or losses)they will earn.
According to the figure shown,if Dunkin Donuts expands,then Starbucks should:
A) also expand their business. 
B) not expand. 
C) give an ultimatum. 
D) None of these statements is true.

Quizplus · Accepted Answer

The figure shows that if Dunkin Donuts expands, Starbucks will lose money if they also expand but will gain some profits if they do not expand. Therefore, the best choice for Starbucks is to not expand and avoid the potential losses.

This Figure Displays the Choices Being Made by Two Coffee