Question: I need some help with these problems, thank you so much! Text Question 3.4 55 Question Help a An incumbent can commit to producing a

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 3.4 55 Question Help a An incumbent can commit to producing a large quantity of output before the Q potential rival decides whether to enter. The incumbent chooses whether to commit to produce a small quantity or a large quantity. The rival then decides Q whether to enter. Enter The payoffs are represented in the game tree illustrated in the gure to the right. (1'800'500) IL" What is the subgame perfect Nash equilibrium? O A. The Nash equilibrium is for the incumbent produce the small quantity and (36009) for the rival to only enter if the incumbent produces the small quantity. Don't enter O B. The game does not have a Nash equililbrium. Enter .. . . . , (1.600.-80) O C. The Nash equrllbrlum Is for the Incumbent to produce the large quantity and for the rival to enter regardless of the incumbent's quantity. 0 D. The Nash equilibrium is for the incumbent produce the large quantity and 3,200.0 for the rival to only enter if the incumbent produces the small quantity. Don't enter ( ) O E. The Nash equilibrium is for the incumbent to produce the large quantity and for the rival to not enter regardless of the incumbent's quantity

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