Problem 1 D 2) 3) Simultaneous market entry game. Two firms are thinking of entering a market. Not entering yields a payoff of zero. Only one firm can operate profitably in the market. If only one firm enters, the entrant gets a payoff of 500. If both enter, they have a costly competition; the expected payoff is -100 for both. Write out the payoff of this simultaneous move game below. Firm B Enter Not Enter Firm A Enter Not Enter The Nash equilibrium / equilibria of the game are a. (Enter, Enter) is the only NE b. (Not Enter, Not Enter) is the only NE c. (Enter, Enter) and (Not Enter, Not Enter) are both NE d. (Enter, Not Enter) and (Not Enter, Enter) are both NE Suppose that Firm A has a cost advantage, which increases its payoff of entering by 50. Which of the following statement is true: a. Firm A now has a dominant strategy b. There is a unique Nash equilibrium c. The (previous) Nash equilibrium (equilibria) is (are) not affected d. All of the above