The market for computer chips consists of two firms. Firm A can lower the production costs of its chips if it adopts this new technology. The fixed setup cost for the new technology is c, but will it would also increase Firm A's revenue. Once the new technology is adopted, however, Firm, B can adopt the technology at a lower setup cost of c/3. If Firm A innovates and Firm B does not innovate, Firm A will earn $30 in revenue while Firm B earns $10. If Firm A innovates and Firm B innovates, both firms earn $20 in revenue. If neither firm innovates, both firms will earn $10. If c= 12, what is the subgame perfect equilibrium? Multiple Choice None of the answers is correct. Neither firm innovates. Firm A innovates, Firm B does not. ooo Firm A innovates, Firm B innovates.

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