Answer Happy

Mako and Productux are the only suppliers of the good Balora, a good with no substitutes. The following payoff matrix shows the estimated profits if each company advertises or not. Mako Productux a. b. Advertise Advertise Not Advertise $50, $55 Not Advertise $75, $25 $25, $75 $20, $15 Does Mako have a dominant strategy to advertise, not advertise, or no dominant strategy? Does Productux have a dominant strategy to advertise, not advertise, or no dominant strategy? Identify any Nash equilibria in the payoff matrix. C. d. Advertising costs decrease by $30. Draw a new payoff matrix reflecting the change. e. Assuming no cooperation, what will the profit be for each company after the decrease in advertising costs?