Table 17-6 Two Home-Improvement Stores (Lopes and HomeMax) in a Growing Urban

Table 17-6
Two home-improvement stores (Lopes and HomeMax) in a growing urban area are interested in expanding their market share. Both are interested in expanding the size of their store and parking lot to accommodate potential growth in their customer base. The following game depicts the strategic outcomes that result from the game. Increases in annual profits (in millions of dollars) of the two home-improvement stores are shown in the following figure.
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-Refer to Table 17-6. Pursuing its own best interest, HomeMax will

A) increase the size of its store and parking lot only if Lopes also increases the size of its store and parking lot.
B) increase the size of its store and parking lot only if Lopes does not increase the size of its store and parking lot.
C) increase the size of its store and parking lot regardless of the decision made by Lopes.
D) not increase the size of its store and parking lot regardless of the decision made by Lopes.

Correct Answer:

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