Two stores are located side by side.They attract customers to each other and to themselves by advertising.The profit functions of the two stores are (75 + x₂) x₁ - 2x²₁ for store 1 and (105 + x₁) x₂ - 2x²₂ for store 2, where x₁ and x₂ are total advertising expenditures by stores 1 and 2 respectively.If each store sets its advertising expenditures independently (as in Nash equilibrium) , how much would store 1 spend on advertising?

A) $27
B) $29
C) $32
D) $24
E) None of the above.

Nash Equilibrium

A concept in game theory where each player's strategy is optimal, given the strategies of all other players, leading to a situation where no player can benefit by unilaterally changing their strategy.

Advertising Expenditures

The amount of money spent on promoting products, services, or brands to potential customers through various media channels.

Profit Functions

A profit function represents the relationship between a firm's profits and the level of output, prices, and costs.