Exit Assignm
1 answer:
You might be interested in
Answer: See explanation
Explanation:
A pay off matrix has been attached.
If Fizzo decides to advertise, it will earn a profit of ($8 million) if Pop Hop advertises and a profit of ($15 million) if Pop Hop does not advertise.
If Fizzo decides not to advertise, then, it will earn a profit of ($2 million) if Pop Hop advertises and on the other hand, a profit of ($11 million) if Pop Hop does not advertise.
If Pop Hop advertises, then Fizzo makes a higher profit if it chooses (to advertise). On the other hand, if Pop Hop doesn't advertise, then Fizzo will make higher profit if it chooses (to advertise).
In a scenario whereby the firms act independently, the strategies that they will choose is that that both of the firms will prefer and choose to advertise.
