McDonald and Burger King are two firms in fastfood market.They both advertise aggresively.Construct a pay-off matrix using the following information:
If neither firrm advertises, McDonald and Burger King each earn a profit of 750 million $ per year.
If both firm advertise McDonald and Burger King each earn a profit of 500 million $ per year.
If McDonald advertises and Burger King doesn’t, McDonald earns a profit of 900 million $ Burger King earns a profit of 400 million $.
If Burger King advertises and McDonald doesn’t Burger King earns a profit of 900 million $ and McDonald earns a profit of 400 million$.
Is there a Nash equilibrium to this advertising game? Explain your answer
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