(Table: Firms a and B XIII) in a Sequential

question 135

Multiple Choice

(Table: Firms A and B XIII) In a sequential game where Firm A chooses first, the Nash equilibrium is Firm A choosing ____ and Firm B choosing ____.

• A) no expansion; no expansion
• B) no expansion; expansion
• C) expansion; no expansion
• D) expansion; expansion

---

Definitions:

Innovation

The process by which ideas are transformed into new products and services that will help firms grow.

Alpha Testing

An attempt by the firm to determine whether a product will perform according to its design and whether it satisfies the need for which it was intended; occurs in the firm’s research and development (R&D) department.

Product Life Cycle

The course of a product’s sales and profits over its lifetime, involving several stages such as introduction, growth, maturity, and decline.

Maturity Stage

A phase in the product life cycle where growth stabilizes, and sales peak, often leading to increased competition and market saturation.