Question

		Firm B
		Expand	No Change
Firm A	Expand	50,20	85,25
	No Change	70,40	95,30
	Q1	Two Players
	Q2	Simultaneous Game
	Q3	Two Strategies
		a. Expand
		b. No Change
	Q4	Explain the outcome of the game

Answer 1

Q1) The two players are firm A and firm B .

Q2) Simultaneous games are games where both players move simultaneously, or if they do not move simultaneously, the later players are unaware of the earlier players' actions (making them effectively simultaneous).

Q3) The two strategies are expand or no change.

Q4) Firm A will choose No change whereas firm B will chose to expand. This strategy gives the best payoff to both the firms because either firms stands to loose little by selection this strrategy.