If Happy Feet chooses to No Ad, Best Nails should ________ and earn ________ million in net profit.
Happy Feet wants to prevent Best Nails from entering the nail salon market. The above game tree illustrates the different strategies and corresponding payoffs for the two firms. Both Happy Feet and Best Nails have the same strategies of advertising (Ad) or not advertising (No Ad). The payoffs represent net profit in millions.
A) Ad; $2 B) No Ad; $3 C) No Ad; $4 D) Ad; $3
D) Ad; $3
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Answer the following statement(s) true (T) or false (F)
1. Increased taste for European goods in the United States leads to decreased demand for euros. 2. Any change in the average income of U.S. consumers will also change the equilibrium exchange rate, ceteris paribus. 3. When the dollar depreciates, this means that a dollar can buy more units of foreign currency than before. 4. If Europe experiences a higher inflation rate than does the United States, European products become less expensive to U.S. consumers. 5. Governments were unable to agree on an alternative fixed-rate approach when the Bretton Woods system collapsed.
If Holland decreases subsidies to its tulip growers, the price of tulips in the United States will rise.
Answer the following statement true (T) or false (F)