Refer to Table 14-1. What is the Nash equilibrium in this game?
A) Star Connections increases its advertising budget, but Godrickporter does not.
B) There is no Nash equilibrium.
C) Both Godrickporter and Star Connections increase their advertising budgets.
D) Godrickporter increases its advertising budget, but Star Connections does not.
Question 2
Refer to Table 14-1. Let's suppose the game starts with each firm adhering to its original budget so that Godrickporter earns a profit of 6,000 and Star Connections earns a profit of 12,000.
Is there an incentive for any one firm to increase its advertising budget?
A) No, neither firm has an incentive to raise its advertising budget.
B) Yes, Godrickporter has an incentive to increase its advertising budget, but Star Connections does not.
C) Yes, Star Connections has an incentive to increase its advertising budget, but Godrickporter does not.
D) Yes, both firms have an incentive to raise their advertising budgets.
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