The table below shows the payoff matrix in the form of short term profits for two firms,A and B,for two different strategies,investing in new capital or not investing in new capital.Payoffs are in millions of dollars. $\begin{array}{c}
\quad\quad\quad\quad\quad\quad\quad\quad\quad\text { Firm B }\
\text { Firm A }
\begin{array}{|l|l|l|}
\hline & \text { Invest } & \text { Not Invest } \
\hline {\text { Invest }} & \$ 20 \text { for } \mathrm{A} & \$ 70 \text { for } \mathrm{A} \
& \$ 20 \text { for } \mathrm{B} & \$ 5 \text { for } \mathrm{B} \
\hline {\text { Not Invest }} & \$ 5 \text { for } \mathrm{A} & \$ 50 \text { for } \mathrm{A} \
& \$ 70 \text { for } \mathrm{B} & \$ 50 \text { for B } \
\hline
\end{array}\end{array}$
Refer to the figure above.For Firm A,_____ is its dominant strategy,and for Firm B,______ is its dominant strategy.
A) investing;not investing
B) not investing;investing
C) investing;investing
D) not investing;not investing

Question

Quizplus · Accepted Answer

For Firm A, investing is its dominant strategy because it gives a higher payoff than not investing, regardless of what Firm B does. For Firm B, investing is also its dominant strategy because it gives a higher payoff than not investing, regardless of what Firm A does.

The Table Below Shows the Payoff Matrix in the Form