Question: I need some help with these problems, thank you so much! Text Question 4.2 Before entry, the incumbent earns a monopoly prot of $30 (prots

I need some help with these problems, thank you so much!

I need some help with these problems, thank you so much! Text

Text Question 4.2 Before entry, the incumbent earns a monopoly prot of $30 (prots in millions). If entry occurs, the incumbent and rival each earn the duopoly prot, $9. Suppose that the incumbent can induce the government to require all rms to install pollution-control devices that cost each rm $12. Should the incumbent urge the government to require pollution-control devices? Why or why not? Assume for simplicity the game tree is illustrated in the gure to the right. All prots are in millions. What is the subgame perfect Nash equilibrium? O A. The Nash equilibrium is for the incumbent to require devices and for the rival to not enter regardless of whether devices are required. O B. The Nash equilibrium is for the incumbent to require devices and for the rival to enter regardless of whether devices are required. 0 C. The game does not have a Nash equililbrium. O D. The Nash equilibrium is for the incumbent to require devices and for the rival to only enter if devices are not required. 0 E. The Nash equilibrium is for the incumbent to not require devices and for the rival to only enter if devices are not required. 55 Question Help Enter (99) (30,0) Don't enter Enter (_ 3, _ 3) Devices (18,0) Don't enter

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