The City of Dustin Is Going to Grant an Exclusive

question 97

Multiple Choice

The city of Dustin is going to grant an exclusive contract to provide cable TV for the next year.The economic profit of the contract is thought to be $5 million.MegaCable and Acme are competing for the contract.The firm that spends the most on lobbying will be awarded the contract.
Suppose MegaCable spends $2,000,002 on lobbying while Acme spends $2,000,001.If both firms know what the other is spending,the expected profit to MegaCable is __________ and to Acme it is __________.

• A)$5 million;0
• B)$2,999,998;-$2,000,001
• C)$2.5 million;$2.5 million
• D)$499,998;-$2,000,001

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