14.3 Sequential Dynamic Games
-The above figure shows the payoff to two gasoline stations,A and B,deciding to operate in an isolated town.If firm A chooses its strategy first,then
A) firm A will not enter.
B) firm B's entry is blockaded.
C) both firms will enter.
D) firm A will enter and firm B will not.

Question

14.3 Sequential Dynamic Games 
-The above figure shows the payoff to two gasoline stations,A and B,deciding to operate in an isolated town.If firm A chooses its strategy first,then
A) firm A will not enter. 
B) firm B's entry is blockaded. 
C) both firms will enter. 
D) firm A will enter and firm B will not.

Quizplus · Accepted Answer

If firm A chooses its strategy first, it will enter the market to capture potential profits. Firm B will also enter because it can still earn a positive payoff despite firm A's presence.