Kellogg's and General Mills Are Two of the Dominant Breakfast

question 5

Multiple Choice

Kellogg's and General Mills are two of the dominant breakfast cereal manufactures in the U.S. Each firm can either sign or not sign an exclusive contract with an Olympian gold-medal athlete to appear on the cover of a cereal box. If both companies sign an athlete, they will each make $5 million in economic profit. If only firm signs, they earn $8 million in economic profit and the other firm incurs an economic loss of $1 million. If neither firm signs, they break even. What is the outcome of this game if it is only played once?

• A) Neither Kellogg's nor General Mills will sign an athlete.
• B) Kellogg's will sign an athlete and General Mills will not sign an athlete.
• C) Both Kellogg's and General Mills will sign an athlete.
• D) General Mills will sign an athlete and Kellogg's will not sign an athlete.

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Definitions:

Atelectasis

The collapse of a lung because of fluid, air, pus, or blood.

Lung Cancer

A type of cancer that originates in the lungs, characterized by the uncontrolled growth of cells in the lung tissue.

Asthma

A chronic inflammatory disease of the airways that causes episodes of wheezing, breathlessness, chest tightness, and coughing.

Snoring

The act of making a snorting or grunting sound while asleep, often due to partial obstruction of the airways.