Refer to the information provided in Table 14.5 below to answer the question that follows.
Table 14.5
B's Strategy
$$\begin{array} { l l l l }
\hline & & \text { Advertise } & \text { Don't Advertise } \
\hline & & \text { A's profit } \$ 200 & \text { A's profit } \$ 400 \
& & \text { million } & \text { million } \
& & \text { B's profit } \$ 200 & \text { B's profit } \$ 100 \
& \text { Advertise } & \text { million } & \text { million } \
\text { A's Strategy } & & & \
& & \text { A's profit } \$ 100 & \text { A's profit } \$ 150 \
& \text { Don't } & \text { million } & \text { million } \
& & \text { B'sprofit } \$ 400 & \text { B's profit } \$ 150 \
& \text { Advertise } & \text { million } & \text { million }
\end{array}$$
-Refer to Table 14.5. Firm A's dominant strategy is to not advertise.

Question

Refer to the information provided in Table 14.5 below to answer the question that follows.
Table 14.5
B's Strategy
 $$\begin{array} { l l l l } 
\hline & & \text { Advertise } & \text { Don't Advertise } \
\hline & & \text { A's profit } \$ 200 & \text { A's profit } \$ 400 \
& & \text { million } & \text { million } \
& & \text { B's profit } \$ 200 & \text { B's profit } \$ 100 \
& \text { Advertise } & \text { million } & \text { million } \
\text { A's Strategy }  & & & \
& & \text { A's profit } \$ 100 & \text { A's profit } \$ 150 \
& \text { Don't } & \text { million } & \text { million } \
& & \text { B'sprofit } \$ 400 & \text { B's profit } \$ 150 \
& \text { Advertise } & \text { million } & \text { million }
\end{array}$$
-Refer to Table 14.5. Firm A's dominant strategy is to not advertise.

Quizplus · Accepted Answer

A dominant strategy is one that results in the highest payoff for a player, no matter what the other player does. In this case, for Firm A, advertising results in a profit of $200 million if B advertises and $100 million if B doesn't, compared to not advertising, which results in $400 million if B advertises and $150 million if B doesn't. There is no single strategy (advertise or not advertise) that always gives A a higher profit regardless of B's action, so A does not have a dominant strategy based on the given table.

Refer to the Information Provided in Table 14 -Refer to Table 14