Refer to Figure 14-4. What is the equilibrium outcome in this ...

[dbose]

Refer to Figure 14-4. What is the equilibrium outcome in this game and is this a subgame-perfect equilibrium?
 
  A) Either offer of 30 or 40 per copy of the software package is accepted and these two equilibria are subgame-perfect equilibria.
  B) In the equilibrium, neither offer is accepted as Rainbow Writer holds out for a better deal. The two rejection outcomes are subgame-perfect equilibria.
  C) Either offer of 30 or 40 per copy of the software package is accepted but these are not are subgame-perfect equilibria.
  D) In the equilibrium, Odeon offers 40 per copy of the software package and is accepted but this is not a subgame-perfect equilibrium.

Question 2

Recent research has shown that the first firm to enter a market often does not have a long-term advantage over later entrants into the market. An example that has been used to illustrate this is
 
  A) Xerox, which became a generic term for making photocopies.
  B) McDonald's entry into the high-end coffee market.
  C) the introduction of the first ballpoint pen in 1945.
  D) Abercrombie and Fitch, which was the first clothing company to market to young men.

[tanna.moeller]

Answer to Question 1

A

Answer to Question 2

C