This Figure Displays the Choices Being Made by Two Coffee

question 28

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.
If the players in the figure shown act in their own self-interest,then we know that Dunkin Donuts will earn:

• A) $2 million.
• B) $1 million.
• C) $2 million
• D) $0 million.

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Definitions:

Bran Flakes

A type of breakfast cereal made from bran, which is the hard outer layer of cereal grains.

Food

Any nutritious substance that people or animals eat or drink, or that plants absorb, in order to maintain life and growth.

Concrete

Refers to real, tangible objects or substances, as opposed to abstract concepts or qualities.

Emotion

A complex state of feeling resulting in physical and psychological changes that influence thought and behavior.