Figure 14-5 a Few Years Ago Netflix (N) Pioneered

Figure 14-5 A few years ago Netflix (N) pioneered an online DVD rental service. Blockbuster (B) , a brick and mortar DVD/video rental company, waited until Netflix had been in business for over a year before deciding whether to establish its own online rental service. At this point, Netflix had to decide whether or not to lower its subscription price in order to deter Blockbuster's entry into the market. Figure 14-5 shows the decision tree for the Netflix-Blockbuster entry game.
-Refer to Figure 14-5. If Netflix lowers its price will this deter Blockbuster from setting up an online DVD rental service?

A) Yes, because Blockbuster stands to lose $1 million if it competes with Netflix.
B) Yes, because Blockbuster will make a smaller profit than Netflix if it chooses to compete.
C) No, because Blockbuster will make a profit if it competes with Netflix.
D) No, because Blockbuster will make a larger profit than Netflix if it chooses to compete.