Suppose Two Firms,Allstom from France,and Bombardier from Canada,are Bidding on a Contract

Suppose two firms,Allstom from France,and Bombardier from Canada,are bidding on a contract to replace train cars for the subway system in Mexico City.If they bid the same amount,they share the contract-otherwise,the low bid wins.The figure below shows the payoff matrix for this contest. FIGURE 11-5
-Refer to Figure 11-5.What is the Nash equilibrium in this bidding contest between Allstom and Bombardier?

A) The two firms will co-operate and maximize their joint profits at $10 million each.
B) Each firm will bid the high price,expecting a larger total profit.
C) Each firm will bid the low price,and each will earn a profit of $2.5 million.
D) There is no Nash equilibrium in this bidding contest,because each firm can expect to earn at least $5 million.
E) both A and C are Nash equilibria.