Exhibit 15-6
Refer to Exhibit 15-6.The manufacturers of Pepsi and Coca-Cola must each decide whether to launch new ad campaigns to advertise their respective soft drinks.The payoff matrix shows the profits earned from sales of Pepsi and Coca-Cola under alternative advertising scenarios.Based on this information,one can say that:
A) if Pepsi introduces new ads and Coca-Cola does not, then profits from the sale of Pepsi equal $80 million.
B) Coca-Cola will earn the greatest profit if it advertises and Pepsi does not.
C) Pepsi will earn the greatest profit if it introduces new ads.
D) combined profits for the two firms will be greatest if neither firm were to introduce new ads.
Correct Answer:
Verified
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