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Business, 19.12.2019 02:31 luislopez05

Suppose that each of the two firms has the independent choice of advertising its product or not advertising. if neither advertises, each gets $10 million in profit; if both advertise, their profits will be $5 million each; and if one advertises while the other does not, the advertiser gets a profit of $15 million while the other gets a profit of $2 million. according to game theory, if the firms could collude to maximize profit:

a. both may or may not advertise.

b. both will advertise.

c. one will advertise and the other will not.

d. neither will advertise.

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