In a duopoly where both firms can choose to advertise or not, if Firm A has a dominant strategy of not advertising, what can be inferred about Firm B's optimal strategy?

In a duopoly, when Firm A has a dominant strategy of not advertising, it means that no matter what Firm B decides to do, Firm A will always be better off by choosing not to advertise. This situation suggests that advertising may not significantly improve Firm A's profits compared to the cost of advertising. For Firm B, knowing that Firm A will not advertise, the optimal strategy could also be to not advertise. If Firm B chooses to advertise while Firm A does not, it might not gain enough customers to cover its advertising costs, leading to lower profits. Therefore, Firm B might also find that not advertising is the best choice, as it avoids unnecessary expenses and aligns with the market behavior established by Firm A.