A small town has a duopoly in its tattoo market. Two firms, "Thread the Needle" and "Ink about it" are both competitors. Daily profit is listed in the payoff matrix. The green payouts belong to "Thread the Needle" and the red, "Ink about it". Why does the outcome where they both advertise yield the same profits for both firms than if they didn't advertise? A because advertising doesn't actually work B because advertising increases the average total costs and negatively impact total profit C because one firm is larger than the other firm D because of a collusive agreement between the firms

A small town has a duopoly in its tattoo market. Two firms, "Thread the Needle" and "Ink about it" are both competitors. Daily profit is listed in the payoff matrix. The green payouts belong to "Thread the Needle" and the red, "Ink about it". Why does the outcome where they both advertise yield the same profits for both firms than if they didn't advertise? A because advertising doesn't actually work B because advertising increases the average total costs and negatively impact total profit C because one firm is larger than the other firm D because of a collusive agreement between the firms

Economics Today and Tomorrow, Student Edition

1st Edition

ISBN:9780078747663

Author:McGraw-Hill

Publisher:McGraw-Hill

Chapter11: Marketing And Distribution

Section: Chapter Questions

Problem 13AA

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A	because advertising doesn't actually work
B	because advertising increases the average total costs and negatively impact total profit
C	because one firm is larger than the other firm
D	because of a collusive agreement between the firms