: As the first of a new class of anti-ulcer drugs, Tagamet was extremely successful when it was introduced. However, the second entrant, Zantac, rapidly took the lion’s share of the market. Zantac works similarly to Tagamet but has fewer side effects, could be taken less frequently when it was first introduced, and was promoted more effectively. Enter $1 X1 Enter -Zantac The extensive-form game illustrated in the figure to the right shows the payoffs for Tagamet and Zantac entering the market, where Tagamet moves first. No entry $2 $0 Tagamet Suppose Zantac’s profit from not entering is always zero and that Zantac’s profit from entering is always positive. Enter $0 Zantac will have a higher profit than Tagamet, if X2 No entry -Zantace O A. Zantac’s profit from entering when Tagamet enters is larger than $1. No entry $0 $0 O B. Zantac’s profit from entering when Tagamet enters is larger than $0. O C. Zantac’s profit from entering when Tagamet does not enter is larger than $1. OD. Zantac’s profit from entering when Tagamet enters is smaller than $2. O E. Zantac’s profit from entering when Tagamet does not enter is larger than $0.

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