This Figure Displays the Choices Being Made by Two Coffee

question 100

Multiple Choice

This figure displays the choices being made by two coffee shops: Starbucks and Dunkin Donuts.Both companies are trying to decide whether or not to expand in an area.The area can handle only one of them expanding,and whoever expands will cause the other to lose some business.If they both expand,the market will be saturated,and neither company will do well.The payoffs are the additional profits (or losses) they will earn.
According to the figure shown,Starbucks:

• A) has a dominant strategy to expand.
• B) has a dominant strategy not to expand.
• C) has first-mover advantage.
• D) should wait to see what Dunkin Donuts is going to do.

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