The Table Below Shows the Payoff Matrix in the Form

question 78

Multiple Choice

The table below shows the payoff matrix in the form of short term profits for two firms,A and B,for two different strategies,investing in new capital or not investing in new capital.Payoffs are in millions of dollars. $\begin{array}{c}\quad \quad \quad \quad \quad \quad \quad \text { Firm } B\\\text { Firm } A\begin{array}{|l|l|l|}\hline& \text { Invest } & \text { Not Invest } \\\hline {\text { Invest }} & \$ 20 \text { for } \mathrm{A} & \$ 70 \text { for } \mathrm{A} \\& \$ 20 \text { for } \mathrm{B} & \$ 5 \text { for } \mathrm{B} \\\hline{\text { Not Invest }} & \$ 5 \text { for } \mathrm{A} & \$ 50 \text { for } \mathrm{A} \\& \$ 70 \text { for } \mathrm{B} & \$ 50 \text { for } \mathrm{B} \\\hline\end{array}\end{array}$
Refer to the figure above.An industrial spy comes to firm B and offers to pay B in exchange for B's certain and enforceable promise to not invest.How much must the spy pay B?

• A)$0.
• B)At least $15 million.
• C)At least $35 million.
• D)At least $50 million.

---

Definitions:

Common Resource

A resource like air or water that is accessible to all but is susceptible to overuse and depletion because it is not privately owned.

Public Good

Goods or services that are made available to the entire society for free, by the government or a private organization or individual, not aimed at generating profit.

Common Resource

A type of good that is rivalrous but non-excludable, meaning its use by one individual diminishes its availability for others, but no one can be effectively excluded from using it.

Overuse

Utilization of a resource or service to an extent that exceeds its sustainable capacity.