If You Advertise and Your Rival Advertises, You Each Will

question 94

Multiple Choice

If you advertise and your rival advertises, you each will earn $5 million in profits.If neither of you advertise, you will each earn $10 million in profits.However, if one of you advertises and the other does not, the firm that advertises will earn $15 million and the non advertising firm will earn $1 million.Which of the following is true?

• A)A dominant strategy for Firm A is to advertise.
• B)A dominant strategy for Firm B is to advertise.
• C)A Nash equilibrium is for both firms to advertise.
• D)All of the statements associated with this question are correct.

---

Definitions:

Overall Equipment Effectiveness

A measure of manufacturing productivity that combines availability, performance, and quality metrics of equipment.

Machinery

The machines, equipment, and devices that perform various tasks in the manufacturing of goods and provision of services.

Efficiency Rate

The ratio of the actual output produced to the expected standard output, utilized in assessing operational efficiency.

Manufacturing Capacity

The maximum amount of products a facility can produce over a given period under normal working conditions.