Firm 2SellGive away.Sell1: $32: $31: -$12: $4Firm 1Give away.1: $42: -$11: $22: $2Two software firms have developed an identical new software application. They are debating whether to give the new app away freeand then sell add-ons or sell the application at $30 a copy. The payoff matrix is above and the payoffs are profits in millions of dollars.What is Firm 1's best strategy?O Give away the application only if Firm 2 sells the application.O Sell the application at $30 a copy regardless of what Firm 2 does.● Give away the application regardless of what Firm 2 does.O Give away the application only if Firm 2 gives away the application.

The dominant strategy is the best course of action no matter what type of strategy is followed by…

m2 Sell Give away Sell 1: $3 2: $3 1: -$1 2: $4 Firm 1 Give away. 1: $4 2: -$1 1: $2 2: $2 software firms have developed an identical new software application. They are debating whether to give the new app away fre then sell add-ons or sell the application at $30 a copy. The payoff matrix is above and the payoffs are profits in millions of dolla at is Firm 1's best strategy? Give away the application only if Firm 2 sells the application. Sell the application at $30 a copy regardless of what Firm 2 does. Give away the application regardless of what Firm 2 does.

m2 Sell Give away Sell 1: $3 2: $3 1: -$1 2: $4 Firm 1 Give away. 1: $4 2: -$1 1: $2 2: $2 software firms have developed an identical new software application. They are debating whether to give the new app away fre then sell add-ons or sell the application at $30 a copy. The payoff matrix is above and the payoffs are profits in millions of dolla at is Firm 1's best strategy? Give away the application only if Firm 2 sells the application. Sell the application at $30 a copy regardless of what Firm 2 does. Give away the application regardless of what Firm 2 does.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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