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Text Question 7.2 Question Help Derive the mixed strategy equilibrium if both Intel and AMD act simultaneously in the game in the Managerial Solution. Intel and AMD, the dominant central processing unit manufacturers, decide Intel whether to set their advertising levels low or high. For now, suppose that they play this game once, act simultaneously, and their profits are symmetric. If both choose low levels of advertising, Intel's profit, m, and AMD's profit, TA, are each Low High 2. If both choose high, each earns 3. If Intel's advertising is high and AMD's is low, 1 = 9 and TA = 6. If Intel's advertising is low and AMD's is high, m = 6 and $2 $9 TA = 9. Low Let the probability that a firm chooses low be a for Intel and B for AMD. If the firms $2 $6 choose their advertising independently, then of is the probability that both choose AMD low advertising, (1- a)(1 - B) is the probability that both choose high advertising, $6 $3 "(1 - B) is the probability that Intel chooses low and AMD chooses high, and (1 - a) is the probability that Intel chooses high and AMD chooses low. High O A. The mixed-strategy Nash equilibrium is for both firms to select the high $9 $3 price (a = P = 0). O B. The mixed-strategy Nash equilibrium is for Intel to choose low with probability 0.700 (a = 0.700) and for AMD to choose low with probability 0.700 (B = 0.700). O C. The mixed-strategy Nash equilibrium is for Intel to choose low with probability 0.300 (a = 0.300) and for AMD to choose low with probability 0.300 (B = 0.300). O D. This game has no mixed-strategy Nash equilibria