Suppose that BMW and Audi are introducing new cars to the market at the same trade show. If both companies introduce a hybrid car, they will each earn $200 million. If they both introduce an electric...

Suppose that BMW and Audi are introducing new cars to the market at the same trade show. If both companies introduce a hybrid car, they will each earn $200 million. If they both introduce an electric car, they will each make $400 million. However, if they introduce different types of cars, the manufacturer that produces the electric car will earn $900 million, while the manufacturer that produces the hybrid car will make $500 million. In addition, BMW has committed to introducing their car first at the tradeshow by agreeing to pay Audi a guaranteed $200 million.

1) Complete a game tree to represent this game.

2) Based on your solution in part (a), determine the subgame perfect Nash Equilibrium solution.