Question

PLEASE SELECT THE BEST ANSWER BELOW. SELECT A, B,C or D IN YOUR ANSWERS BELOW. THANKS.

The following is a payoff matrix showing profit in millions of dollars when two companies simultaneously decide on various advertising budgets ($1 million, $2 million, or $3 million):

Blank for Formatting	Pizza Hut Advertising Budget: $1 mill	Pizza Hut Advertising Budget: $2 mill	Pizza Hut Advertising Budget: $3 mill
Papa John's Advertising Budget: $1 mill	$65/$75	$55/$70	$45/$80
Papa John's Advertising Budget: $2 mill	80/70	60/65	55/75
Papa John's Advertising Budget: $3 mill	70/65	65/55	50/60

Question 9

In the first round of strategy elimination (when all three possible budgets are under consideration), which ad budget would the companies exclude?

Select one:

a. Papa Johns would eliminate $1 mill; Pizza Hut would eliminate $2 mill.

b. Papa Johns would eliminate $2 mill; Pizza Hut would eliminate $1 mill.

c. Papa Johns would eliminate $1 mill; Pizza Hut would eliminate $3 mill.

d. Papa Johns would eliminate $3 mill; Pizza Hut would eliminate $3 mill.

Question 10

After the first round of elimination (previous question), would either company make a second-round elimination?

Select one:

a. Neither company would eliminate in the second round.

b. Papa Johns would not eliminate either; Pizza Hut would eliminate $3 mill.

c. Papa Johns would eliminate $3 mill; Pizza Hut would not eliminate either.

d. Papa Johns would eliminate $2 mill; Pizza Hut would eliminate $1 mill.

Question 11

What would be the likely outcome of this simultaneous advertising decision (i.e. what ad budget would each company end up choosing)?

Select one:

a. Papa Johns would pick $2 mill; Pizza Hut would pick $3 mill.

b. Both would choose $3 mill.

c. Papa Johns would choose $3 mill; Pizza Hut would choose $1 mill.

d. Papa Johns would choose $1 mill; Pizza Hut would choose $2 mill.