Use the table below to answer the following questions.
Table 15.2.4

-Refer to Table 15.2.4. The marketers of Budweiser Light beer and Miller Lite beer must decide whether or not to offer new advertising campaigns promoting their products. The payoffs in the table are the economic profit made by Bud and Miller. Which one of the following observations is correct?
A)This game has no dominant strategies.
B)This game has no Nash equilibrium.
C)Miller has a dominant strategy but Bud does not.
D)Bud has a dominant strategy but Miller does not.
E)Bud and Miller each have a dominant strategy.

Question

Use the table below to answer the following questions.
Table 15.2.4
 
-Refer to Table 15.2.4. The marketers of Budweiser Light beer and Miller Lite beer must decide whether or not to offer new advertising campaigns promoting their products. The payoffs in the table are the economic profit made by Bud and Miller. Which one of the following observations is correct?
A)This game has no dominant strategies. 
B)This game has no Nash equilibrium. 
C)Miller has a dominant strategy but Bud does not. 
D)Bud has a dominant strategy but Miller does not. 
E)Bud and Miller each have a dominant strategy.

Quizplus · Accepted Answer

Both Bud and Miller have a dominant strategy. Bud's dominant strategy is to advertise if Miller does not advertise (resulting in a profit of $12 million), and to not advertise if Miller does advertise (resulting in a profit of $8 million). Miller's dominant strategy is to advertise regardless of whether or not Bud advertises (resulting in a profit of $10 million). This game has a unique Nash equilibrium, which is for both firms to advertise (resulting in a profit of $9 million for each firm).

Use the Table Below to Answer the Following Questions