ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Transcribed Image Text:Emily and Brooklyn are competitors in a local market. Each is trying to decide if it is better to advertise on TV, on
radio, or not at all. If they both advertise on TV, each will earn a profit of $5000. If they both advertise on radio, each
will earn a profit of $7000. If neither advertises at all, each will earn a profit of $10,000. If one advertises on TV and
the other advertises on radio, then the one advertising on TV will earn $8000 and the other will earn $3000. If one
advertises on TV and the other does not advertise, then the one advertising on TV will earn $15,000 and the other will
earn $2000. If one advertises on radio and the other does not advertise, then the one advertising on radio will earn
$12,000 and the other will earn $4000. If both follow their dominant strategy, what will Emily do and what will she
earn?
advertise on radio and earn $7000
not advertise and earn $10,000
advertise on TV and earn $5000
advertise on TV and earn $15,000
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