Question $16$

$1$ pts

Table $17-13$

Two home$-$improvement stores $($Lopes and HomeMax$)$ in a growing urban area are interested in expanding their market share. Both are interested in expanding the size of their store and parking lot to accommodate potential growth in their customer base. The following game depicts the strategic outcomes that result from the game. Increases in annual profits of the two home$-$improvement stores are shown in the table below.

$\backslash$table$[[,$Lopes$],[,$Increase the size of store and parking lot,Do not increase the size of store and parking lot$],[$Increase the size of store and parking lot,$\backslash$table$[[$Lopes $=$$$1\mathrm{.}0$ million$],[$HomeMax $=$ $$1\mathrm{.}5$ million$]],\backslash$table$[[$Lopes $=$$$0\mathrm{.}4$ million$],[$HomeMax $=$ $$3\mathrm{.}4$ million$]]],[$Do not increase the size of store and parking lot,$\backslash$table$[[$Lopes $=$$$3\mathrm{.}2$ million$],[$HomeMax $=$ $$0\mathrm{.}6$ million$]],\backslash$table$[[$Lopes $=$ $$2\mathrm{.}00$ million$],[$HomeMax $=$ $$2\mathrm{.}5$ million$]]]]$

Refer to Table $17-13.$ When this game reaches a Nash equilibrium, annual profit will grow tyy

$$2\mathrm{.}5$ million for HomeMax and by $$2\mathrm{.}0$ million for Lopes.

$$1\mathrm{.}5$ million for HomeMax and by $$1\mathrm{.}0$ million for Lopes.

$$3\mathrm{.}4$ million for HomeMax and by $$0\mathrm{.}4$ million for Lopes.

$$0\mathrm{.}6$ million for HomeMax and by $$3\mathrm{.}2$ million for Lopes.