Suppose two companies, Macrosoft and Apricot, are considering whether to develop a new product, a touch-screen t-shirt. The payoffs to each of developing a touch-screen t-shirt depend upon the actions of the other, as shown in the payoff matrix below (the payoffs are given in millions of dollars). 
If Macrosoft and Apricot make their decision at the same time, then which of the following statements is correct?
A. The game has more than one Nash equilibrium.
B. The only Nash equilibrium is that both develop a touch-screen t-shirt.
C. The game does not have a Nash equilibrium.
D. The only Nash equilibrium is that neither develops a touch-screen t-shirt.
Answer: A
You might also like to view...
If the utility for two goods "x" and "y" can be measured as U = x, then it can be concluded that
A) "x" and "y" are perfect complements. B) "y" is a "bad". C) the indifference curves on the x,y graph are upward sloping where "x" is measured on the horizontal axis. D) the indifference curves on the x,y graph are vertical where "x" is measured on the horizontal axis.
Which of the following is not an assumption of perfectly competitive markets?
A) There are many sellers and many buyers, all of which are small relative to the market. B) Each firm produces a similar but not identical product. C) There are no barriers to new firms entering the market. D) The products sold by all firms in the market are identical.