The following table shows the payoff matrix of the two firms (Firm X and Firm Y) in dollars when they advertise and when they do not advertise. Table 11.1
According to the payoffs in Table 11.1:
A) Firm X will not advertise, no matter what, if Firm Y does not advertise.
B) Firm X will advertise only if Firm Y does not advertise.
C) Firm X does not have a dominant strategy, but Firm Y does.
D) Firm Y does not have a dominant strategy, but Firm X does.
E) Both firms would be better off if neither advertised.
Correct Answer:
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