Question: In Problem 10, suppose that each firm has a $10 million direct sales budget to allocate between the two markets. Again, revenues in the markets

In Problem 10, suppose that each firm has a $10 million direct sales budget to allocate between the two markets. Again, revenues in the markets are split in proportion to direct sales dollars spent.

a. Create a three-entry spreadsheet to find firm A's total revenue if it spends $7 million in market I (and the remainder in market II) while firm B spends $6 million in market I. Which firm earns the greater total revenue?

b. Use the spreadsheet optimizer to find firm A's optimal spending split when firm B's split is $6 million-$4 million.

c. Find firm A's optimal spending splits, if firm B spends $5 million, $6 million, $6.25 million, $9 million, or $9.5 million in market I. What is the symmetric equilibrium of this spending game? Provide an intuitive explanation for the equilibrium.

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