Zippy's and Tony's are rival pizza restaurants in a small town (together they form a local duopoly) .Zippy's management determines that if it increases its advertising expenditures,it will increase profits regardless of whether Tony's increases its advertising budget.Based on this information,we can conclude that:

A) this is a one-time game.
B) Zippy's has a dominant strategy in this advertising game.
C) this advertising game will reach a Nash equilibrium.
D) Zippy's has first-mover advantages in this advertising game.

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Leywes Pierre · Accepted Answer

Final Answer : B, Explanation :  If Zippy's management determines that increasing its advertising expenditures will increase profits regardless of whether Tony's increases its advertising budget, then Zippy's has a dominant strategy in this game. A dominant strategy is a strategy that is the best for a player, no matter what the other player does. Therefore, Zippy's would always choose to increase its advertising budget, regardless of whether Tony's does or not.

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