Table 113 Firm A(Alistair's)and Firm B (Baine's)are the Only Firms

question 37

Multiple Choice

Table 11.3 Firm A(Alistair's) and Firm B (Baine's) are the only firms selling luggage in the upscale town of Adelaide.Each firm must decide on whether to increase its advertising spending to compete for customers.If one firm increases its advertising budget but the other does not, then the firm with the higher advertising budget will increase its profit.Table 11.3 shows the payoff matrix for this advertising game.
-Refer to Table 11.3.Does Baine have a dominant strategy and, if so, what is it?

• A)Yes, Baine should increase its advertising budget.
• B)Yes, Baine should keep its advertising budget as is.
• C)There are two dominant strategies: if Alistair increases its advertising budget, then Baine's best bet is to keep its budget the same, but if Alistair does not increase its spending, then Baine should raise its advertising budget.
• D)No, there is no dominant strategy.

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Definitions:

Commensalism

A relationship between two living organisms where one benefits and the other is neither harmed nor benefits significantly.

Parasitism

A biological relationship where one organism, the parasite, lives on or in another organism, the host, causing it harm.

Apex Predator

is a predator at the top of a food chain, with no natural predators of its own, playing a crucial role in maintaining the health and balance of ecosystems.

Commensalism

A type of symbiotic relationship where one organism benefits without harming or benefiting the other.