Refer to the Table Below to Answer the Following Questions

question 82

Multiple Choice

Refer to the table below to answer the following questions.
Table 14.2.6
-Refer to Table 14.2.6.Firms A and B can conduct research and development (R&D) or not conduct it.R&D is costly but can increase the quality of the product and increase sales.The payoff matrix is the economic profits of the two firms and is given above,where the numbers are millions of dollars.The Nash equilibrium

• A)occurs when both A and B conduct R&D.
• B)occurs when only A conducts R&D.
• C)occurs when only B conducts R&D.
• D)occurs when neither A nor B conduct R&D.
• E)does not occur.

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Definitions:

Treasury Bills

Short-term government securities with maturation periods of one year or less, considered a safe and liquid investment option.

Opportunity Costs

The cost of missing out on the next best alternative when making a decision.

Cash Balance

The amount of cash a company has available at any given time, including bank balances and cash on hand.

Opportunity Cost

The cost of foregoing the next best alternative when making a decision. It represents the benefits that could have been received but were given up to take another course of action.