Refer to the above payoff matrix for the profits (in $ millions) of two firms (X and Y) making a decision to advertise or not. Which of the following is the outcome of the dominant strategy without cooperation?

A) Both firm X and firm Y choose not to advertise.
B) Both firm X and firm Y choose to advertise.
C) Firm X chooses to advertise while firm Y chooses not to advertise.
D) Firm X chooses not to advertise while firm Y chooses to advertise.

ANSWER:

B