Coca-Cola New ads No new ads Pepsi New advertising campaign P: $80 mil C: $80 mil P: $180 mil C: $40 mil No new advertising campaign P: $40 mil C: $180 mil P: $100 mil C: $100 mil The manufacturers of Pepsi and Coca-Cola must each decide whether to launch new ad campaigns to advertise their respective soft drinks. The payoff matrix shows the profits earned from sales of Pepsi and Coca-Cola under alternative advertising scenarios. Refer to Exhibit 15-6. In this situation:
A.
the interaction among firms resembles the "Prisoners' Dilemma."
B.
neither firm as a dominant strategy.
C.
Pepsi has a dominant strategy to introduce new ads, but Coca-Cola does not.
D.
if Pepsi begins a new advertising campaign, Coca-Cola is better off not beginning their own advertising campaign.