Chrissy and Marvin Are Competitors in a Local Market and Each

question 253

Multiple Choice

Chrissy and Marvin are competitors in a local market and each is trying to decide if it is worthwhile to advertise. If both of them advertise, each will earn a profit of $10,000. If neither of them advertise, each will earn a profit of $20,000. If one advertises and the other doesn't, then the one who advertises will earn a profit of $30,000 and the other will earn $14,000. To earn the highest profit, Chrissy

• A)should advertise, and she will earn $10,000.
• B)should advertise, and she will earn $30,000.
• C)should not advertise, and she will earn 20,000.
• D)has no dominant strategy.

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