Emily and Brooklyn are competitors in a local market. Each is trying to decide if it is better to advertise on TV, on radio, or not at all. If they both advertise on TV, each will earn a profit of $5000. If they both advertise on radio, each will earn a profit of $7000. If neither advertises at all, each will earn a profit of $10,000. If one advertises on TV and the other advertises on radio, then the one advertising on TV will earn $8000 and the other will earn $3000. If one advertises on TV and the other does not advertise, then the one advertising on TV will earn $15,000 and the other will earn $2000. If one advertises on radio and the other does not advertise, then the one advertising on radio will earn $12,000 and the other will earn $4000. If both follow their dominant strategy, what will Emily do and what will she earn? advertise on radio and earn $7000 not advertise and earn $10,000 advertise on TV and earn $5000 advertise on TV and earn $15,000

Emily and Brooklyn are competitors in a local market. Each is trying to decide if it is better to advertise on TV, on radio, or not at all. If they both advertise on TV, each will earn a profit of $5000. If they both advertise on radio, each will earn a profit of $7000. If neither advertises at all, each will earn a profit of $10,000. If one advertises on TV and the other advertises on radio, then the one advertising on TV will earn $8000 and the other will earn $3000. If one advertises on TV and the other does not advertise, then the one advertising on TV will earn $15,000 and the other will earn $2000. If one advertises on radio and the other does not advertise, then the one advertising on radio will earn $12,000 and the other will earn $4000. If both follow their dominant strategy, what will Emily do and what will she earn? advertise on radio and earn $7000 not advertise and earn $10,000 advertise on TV and earn $5000 advertise on TV and earn $15,000

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter15: Strategic Games

Section: Chapter Questions

Problem 5MC

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