Question: I need assistance for this question Question 3 (13 points) Consider the following game. Firm E (entrant) is considering entering a market that currently has
I need assistance for this question

Question 3 (13 points) Consider the following game. Firm E (entrant) is considering entering a market that currently has a single incumbent (rm I). If it does so (b3,r playing \"in"}, the incumbent can respond in one of two ways: it can either accommodate the entrant. giving up some of its sales but causing no change in the market price, or it can fight the entrant. engaging in a costly market war that dramatically lowers the market price. The extensive form of this game is depicted below Fin'nE a) Represent the game in Normal Form and nd all the pure strategy Nash Equilibria. (6 Marks) b) Using the extensive form. find the Subgame Perfect Nash Equilibria. Compare your result to the one found in part a) and discuss the results. ('7 Marks)
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