Suppose that each of the two firms has the independent choice of advertising its product or not advertising. if neither advertises, each gets $10 million in profit; if both advertise, their profits will be $5 million each; and if one advertises while the other does not, the advertiser gets a profit of $15 million while the other gets a profit of $2 million. according to game theory, if the firms could collude to maximize profit:

a. both may or may not advertise.

b. both will advertise.

c. one will advertise and the other will not.

d. neither will advertise.

d. neither will advertise.

Explanation:

A game theory is used to analyse the choices of firms in an oligopoly.

A collusion is when two or more firms come together to make a decision usually concerning price.

If both firms advertise, the profit is less than when both firms don't advertise. Therefore, if both firms collude, they would agree not to advertise in order to maximise profits.

But the Nash equilibrium would be for each firm to advertise.

Nash equilibrium is the best strategy for a player in a game regardless of what the other player plays.

I hope my answer helps you.

$527.7.if the following was the question  $527.7 is the answer.students who are trying to raise funds have an agreement with a local pizza chain. the chain has agreed to sell them pizzas at a discount, which the students can then resell to families in the local community for a profit. it is expected that of the 500 families in the community, at most 70% will buy pizza. based on a survey of their personal preferences, the students believe that they should order no more than 120 cheese pizzas, no more than 150 pepperoni pizzas, and no more than 100 vegetarian pizzas. they also want to make sure that at least 20% of the total pizzas are cheese and at least 50% of the pizzas are pepperoni. they make a profit of $1.45, $1.75, and $1.98, respectively, for each cheese, pepperoni, and vegetarian pizza they resell. how many pizzas of each type should they buy?

The answer is a i think