Two firms compete by advertising. Given the payoff matrix to this advertising game, identify each firm's best response to its rival's possible actions. If Firm 2 does not advertise, then Firm 1 should ▼ advertise not advertise and if Firm 2 advertises, then Firm 1 should ▼ not advertise advertise. If Firm 1 does not advertise, then Firm 2 should ▼ not advertise advertise and if Firm 1 advertises, then Firm 2 should ▼ not advertise advertise. Does either firm have a dominant strategy? Firm 1's dominant strategy is to ▼ not advertise advertise and Firm 2's dominant strategy is to ▼ not advertise advertise. What is the Nash equilibrium? A. The Nash equilibrium is for both firms to advertise. B. The Nash equilibrium is for Firm 1 to advertise and Firm 2 to not advertise. C. This game has no Nash equilibria. D. The Nash equilibrium is for both firms to not advertise. E. The Nash equilibrium is for Firm 1 to not advertise and Firm 2 to advertise.
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