Suppose that GM and Ford are each considering whether or not to build a new factory to expand car production. The table below shows the profits that each firm makes depending on their decisions about building a new factory.

	GM builds	GM does not build
Ford builds	GM = $100 million Ford = $100 million	GM = $120 million Ford = $150 million
Ford does not build	GM = $150 million Ford = $120 million	GM = $140 million Ford = $140 million

What is the equilibrium outcome (or outcomes) if both firms are trying to maximize their current profits in the table above?  

Answer rating: 100% (QA)

This is a case of multiple equilibria A B C D Let A B C D r... View the full answer