m2 Sell Give away Sell 1: $3 2: $3 1: -$1 2: $4 Firm 1 Give away. 1: $4 2: -$1 1: $2 2: $2 software firms have developed an identical new software application. They are debating whether to give the new app away fre then sell add-ons or sell the application at $30 a copy. The payoff matrix is above and the payoffs are profits in millions of dolla at is Firm 1's best strategy? Give away the application only if Firm 2 sells the application. Sell the application at $30 a copy regardless of what Firm 2 does. Give away the application regardless of what Firm 2 does.
Q: Price (dollars per bottle) 10 8 6 4 2 0 Quantity demanded (bottles per hour) 0 1 2 3 4 5 5. a.…
A: Total revenue (TR) is the total money received by a business from the sale of its products or…
Q: The government spends an additional $668 billion and the marginal propensity to consume is 79%. How…
A: Government spending multiplier: - it is a fraction that shows the magnitude of the change in…
Q: Your college newspaper, The Collegiate Investigator, sells for 90¢ per copy. The cost of producing x…
A: The cost function represents the total cost of production a firm incurs at different output levels.…
Q: What quantity of output wit this profit-maximizing firm choose to se? (Round your response to the…
A: Profit maximization is thе procеss or stratеgy by which a company or an individual aims to gеnеratе…
Q: Assume you own a firm that in the production and supply of maize meal which is a staple food in…
A: Demand elasticity measures how sensitive a good's quantity desired is to variations in its price. It…
Q: Suppose there is some hypothetical economy in which households spend $0.50 of each additional dollar…
A: John Maynard Keynes devised the AD-AS model to explain changes in the economy's production and price…
Q: The American Pharmaceutical Company (APC) has a policy that all capital investments must have a…
A: The payback period is a method used to determine the time it takes for an investment to recoup its…
Q: A small open economy is described by the following equations: C = 50 + 0.75(Y − T ) I = 200 − 20r…
A: A floating exchange rate is a type of exchange rate regime in which the value of a country's…
Q: Suppose that a demand equation is given by q=1750-25p and the cost of producing q units is given by…
A: Economic profit:The economic profit is calculated by subtracting all cost that is incurred in an…
Q: 11. The use of online banking would A) increase; menu B) decrease; shoe-leather C) increase;…
A: The given question tends to the effect of web based depending on the cost related with a high…
Q: 5. Fiscal policy, the money market, and aggregate demand Suppose there is some hypothetical economy…
A: Since you have posted multiple questions, we will provide the solution only to the first question as…
Q: Under scientific management principles, Employers paid higher wages, expecting a more committed…
A: This question relates to the standards of scientific management, a management hypothesis created in…
Q: which of the following is true: 1. Ounanticipated inflation has small effect on the economy. 2.…
A: Inflation is a complex phenomenon with a variety of causes. Some of the most common causes of…
Q: ) If at the beginning of the year the public debt is $20 trillion, government spending and transfers…
A: The public debt is the borrowing of public authorities. The government can take loans from…
Q: Identify whether or not each of the following scenarios describes a competitive market, along with…
A: We should survey every one in view of the three central presumptions of cutthroat business…
Q: Based on the efficiency frontier provided, which companies are operationally efficient? High…
A: The efficiency frontier is a curve that represents the operational efficiency of a company. It shows…
Q: Komal borrows $18,000 from her father to open her accounting practice. She cashed in a $10,000…
A: Loans refer to financial instruments used to extend debt in terms of money, property, or other…
Q: According to the Keynesian-cross analysis, if the marginal propensity to consume is 0.75 and…
A: Gross Domestic Product (GDP) refers to the sum of the values of all the goods and services produced…
Q: Imagine that the graph below shows a pharmaceutical firm's D, MR, and MC curves. The firm operates…
A: Profits refer to the financial gains realized by a business or an individual from their operations…
Q: Find the present worth of earthmoving equipment that has a first cost today of $155,000, an annual…
A: Present value is the concept that states an amount of money today is worth more than that same…
Q: Draw the indifference curves fort he preference indicated below. (Do not forget to represent the…
A: The indifference curve is a visual representation of a bundle of goods that gives an equal amount of…
Q: If the per-unit price is $11, and 7 units are bought and sold, what is the total surplus (consumer…
A: A consumer surplus happens when the price that consumers pay for a product or service is less than…
Q: The following graph represents the money market for some hypothetical economy. This economy is…
A: When the central bank decides to increase the target interest rate, it implements a contractionary…
Q: Ralph consumes apples (A) and bananas (B). His Marshallian demand for bananas is 10.5 p0.2 6p7 B* =…
A: INTRODUCTION :In economics, the Marshallian demand function portrays the correlation between the…
Q: Question 4 $ OBCEF O HIKL O CF O HK OIL O BE Xo A B X₁ What is the minimum the polluter would accept…
A: The Coase theorem deals with the property rights of the individual. The theory creates a market for…
Q: Which of the following statements regarding immunization is correct?
A: Immunization is used to save the portfolio immunized from the changes in some variables like…
Q: Suppose you are the manager of a watchmaking firm operating in a competitive market. Your cost of…
A: The firm is operating in a competitive market.The cost of production is given by C = 400 + 2q2The…
Q: Analyze the relationship between the financial well-being of the healthcare industry and…
A: Objective: Understand the relationship between the financial well-being of the healthcare industry…
Q: Exchange rate topic: When the exchange rate changes, will the European divers on vacation overseas…
A: The global currency market, often known as the foreign exchange or FX market, is a decentralized…
Q: Ten firms compete in a market to sell product X. The total sales of all firms selling the product…
A: One metric used to evaluate market concentration in a particular sector is the four-firm…
Q: Consider the following simultaneous-move game that represents the payoffs from different advertising…
A: The dominant strategy is the best course of action, irrespective of the rival firm's strategy. It is…
Q: (Ch8) Which of the following is NOT a characteristic of the t distribution? a. It is a continuous…
A: The objective of the question is to identify the statement that does not correctly describe a…
Q: Three mutually exclusive alternatives are being considered: Initial cost Benefit at end of the first…
A: The discounted payback period is a variation of the traditional payback period used in capital…
Q: For the economy described below: C = 2,800+ 0.5(YT) - 8,000r IP = 2,000 - 8,000r G = 2,500 NX = 0 T…
A: National income refers to the total income earned by individuals, businesses, and the government…
Q: A monopolist faces the demand curve P= 11 - Q, where Pis measured in dollars per unit and Q in…
A: A monopoly is a market structure in which a single seller or producer dominates the entire supply of…
Q: The maintenance cost for furnaces will be $100,000 per year for 2 years, then changed to $120,000…
A: Cash flow:The net amount of cash or cash equivalents that enters and exits a business or financial…
Q: David-Michael is conducting an experiment, charging different prices for the same products at…
A: David-Michael is conducting a price discrimination experiment, which is a strategy that involves…
Q: In a Cournot oligopoly with N firms and identical marginal costs, what is the relationship between…
A: Within economics, market structures play a pivotal role, in shaping the dynamics that govern…
Q: Use the following information to answer the question. You are managing a competitive co farm that…
A: There is a competitive market for corn. The price for corn either be $12 or $6 per bushel. The…
Q: 3. In a competitive economy with many firms there are two types of workers that look ex ante…
A: Utility is the satisfying power of the commodity. In cardinal terms, it is measured in Utils,…
Q: Identify the most significant sources of disruption over the past several years and propose policies…
A: Aggregate demand (AD) is a macroeconomic concept that represents the total demand for goods and…
Q: Year Median Income Average Income 1972…
A: Economics:It is a subject matter that focuses on the rational management of scarce resources that…
Q: A healthcare provider that is a monopoly - faces the following market demand schedule: P 100 90 80…
A: Profits refer to the financial gains realized by a business or an individual from their operations…
Q: The figure below shows the cost and revenue curves faced by a monopolist. The profit-maximizing…
A: This can be defined as a cost that shows the type of cost that an individual, business, or any other…
Q: Suppose that the government feels sad for athletes and decides to subsidize retired athletes when…
A: Deriving the New Intertemporal Budget Constraints:For the non-pro case:In period 1, the non-pro…
Q: The prisoner's dilemma shown displays the payoffs associated with two firms: Firm A and Firm B.…
A: The Prisoner's Dilemma is a concept in game theory that illustrates a situation where two…
Q: QUESTION 3 Consider the following graph: Price and cost (per necklace) 260.00 240.00 220.00- 200.00…
A: Profit maximization for a firm refers to the process of adjusting various factors, such as pricing…
Q: Considering all the bailout money the public has been made responsible for, is the existence of…
A: Bailout money:Bailout money is the money that is people's money and the government uses it for…
Q: Using the cost data for Project X and Project Y below, conduct a Present Worth Analysis to calculate…
A: Present Worth AnalysisWith the help of Present Worth Analysis investment options can be compared.…
Q: Market A B C D Characteristic Demand is very clastic relative to supply. Demand is very inelastic…
A: The demand curve shows an inverse relationship between price and quantity demanded. Demand is a…
Step by step
Solved in 3 steps
- Save Answer Consider two cigarette companies, PM Inc. and Brown Inc. If neither company advertises, the two companies spit the market and earn $60 million each. If they both advertise, they again split the market, but profits are lower by $20 million since each company must bear the cost of advertisirlg. Yet if one company advertises while the other does not, the one that advertises attracts customers from the other. In this case, the company that advertises earns $70 million while the company that does not advertise earns only $30 million. What will these two companies do if they behave as individual profit maximizers? Neither company will advertise, and PM Inc. earns $60. One company will advertise, the other will not. Brown Inc. earns $70. Both companies will advertise, and PM Inc. earns $40. Both companies will advertise, and PM Inc. earns $60.fnan421 WWord Gozden Geç r Gorunum Varc m Ne yaomak steci gnz soy evn 1) Two firms, X and Y, are planning to market their new products. Each firm can develop either TV or Laptop. Market research indicates that the resulting profits to each firm for the alternative strategies are given by the following payoff matrix: FIRM Y TV LAPTOP FIRM X TV 30, 30 50, 35 LAPTOP 40,70 20, 20 A) If both firms make their decisions at the same time and follow maximin (low-risk) strategies, what will the outcome be? B) Suppose both firms try to maximize profits, but Firm X has a head start in planning, and can commit first. Now what will the outcome be? What will the outcome be if Firm Y has a head start in planning and can commit first? IJagtar and Ravi both grow mangoes, which they sell in the same local market. They are deciding whether to pick 5 baskets worth of mangoes or 10 baskets, and have the following profit matrix: Jagtar 5 1 17 5 1 22 16 14 Ravi 1 24 14 a. What is the Nash equilibrium if both individuals make their decisions simultaneously? b. Does your analysis change if the local market charges a lump-sum fee of 12 to set up a stall and sell the mangoes in the space it provides? c. What would happen if the local market were instead to charge a lump-sum fee of 18?
- 12. To advertise or not to advertise Suppose that two firms, Hatte Latte and Bean Bruuer, are the only sellers of espresso in some hypothetical market. The following payoff matrix gives the profit (in millions of dollars) earned by each company depending on whether or not it chooses to advertise: Bean Bruuer Advertise Doesn't Advertise Advertise Hatte Latte Doesn't Advertise 9,9 3,15 15,3 11, 11 For example, the lower left cell of the matrix shows that if Bean Bruuer advertises and Hatte Latte does not advertise, Bean Bruuer will make a profit of $15 million, and Hatte Latte will make a profit of $3 million. Assume this is a simultaneous game and that Hatte Latte and Bean Bruuer are both profit-maximizing firms. If Hatte Latte chooses to advertise, it will earn a profit of $ does not advertise. million if Bean Bruuer advertises and a profit of $ million if Bean Bruuer If Hatte Latte chooses not to advertise, it will earn a profit of $ does not advertise. million if Bean Bruuer…Кееp production $200 million $300 million Using what you know about the prisoner's dilemma, what would be the profit for Antel and constant IMD in millions? (cooperate Antel profit Antel profit is $20 million is $200 million Antel options IMD profit is IMD profit is $20 million $100 million Increase production (act independently) Antel profit Antel profit is $100 million is $300 million Antel profit: S million million IMD profit: S What would be the best collective option for both firms? Select all of the reasons Antel and IMD would make more profit at the original constant production level? соорerate Because overall demand for computer chips act independently will increase Because they can both charge more for the product at the given level of production Because it restricts the supply of computer chipsWhy can Q-learning sustain collusion? a. Because collusion maximizes firms' profit. b. Because collusion is the Nash equilibrium of the pricing game, even if it is played only once. c. Because the algorithm takes into account future profits, and learn that price cutting today will lead to price war tomorrow. d. Because firms use the algorithm to communicate with each other and sustain collusion. 21 Suppose a platform tries to recommend the best movie to Ann and Ben. Movie 1's quality is uniformly distributed from 0 to 1. Movie 2's quality is uniformly distributed from 0.5 to 1. Suppose the platform recommends a movie to Ann and Ben at the same time. What are the expected quality of movie 1 and 2, and which one should it recommend? a. 0.5, 0.5, movie 1. b. 0.75, 0.5, movie 1. c. 0.5, 1, movie 2. d. 0.5, 0.75, movie 2.
- Why does Pinterest see Google as its biggest competitor? Why does Pinterest prioritize the smartphone platform while developing new features and products?below cost? That is, explain a rationale of loss leaders, using your U4. The coconut-milk carts from Exercise S7 set up again the next day. Nearly 172 [CH. 5] SIMULTANEOUS- MOVE GAMES a dollars of a pound of cheese. (a) Initially, L'Épicerie runs La Boulangerie and La Fromagerie as if the were separate firms, with independent managers who each try to maximize their own profit. What are the Nash equilibrium quanti- ties, prices, and profits for the two divisions of L'Épicerie, given the new quantity equations? (b) The owners of L'Épicerie think that they can make more total profit by coordinating the pricing strategies of the two Yuppietown divi- sions of their company. What are the joint-profit-maximizing prices for bread and cheese under collusion? What quantities do La Bou- langerie and La Fromagerie sell of each good, and what is the profit that each division earns separately? (c) In general, why might companies sell some of their goods at prices below cost? That is, explain a…8. To advertise or not to advertise Suppose that Creamland and Dairy King are the only two firms that sell ice cream. The following payoff matrix shows the profit (in millions of dollars) each company will earn depending on whether or not it advertises: Creamland Dairy King Advertises Doesn't Advertise 9,9 Doesn't Advertise 3, 15 Advertises 15, 3 11, 11 For example, the upper-right cell shows that, if Creamland advertises and Dairy King doesn't advertise, Creamland will make a profit of $15 million, and Dairy King will make a profit of $3 million. Assume this is a simultaneous game and that Creamland and Dairy King are both profit-maximizing firms. If Creamland decides to advertise, it will earn a profit of $ not advertise. If Creamland decides not to advertise, it will earn a profit of $ does not advertise. million if Dairy King advertises and a profit of $ If Dairy King advertises, Creamland makes a higher profit if it chooses million if Dairy King advertises and a profit of $…
- Use the payoff matrix below to answer the next two questions. a. b. C. d. Topco does not advertise a. b. Topco advertises C. d. Acme does not advertise Both firms earn profits of $50 million. 30. Suppose Acme and Topco must choose whether or not to advertise without knowing what the other will do. In the Nash equilibrium: Topco earns profits of $60 million and Acme earns profits of $30 million. Acme advertises Topco earns profits of $30 million and Acme earns profits of $60 million Both firms earn profits of $40 million. 31. Which strategies maximize Acme's and Topco's combined profit? Neither advertises neither Acme nor Topco chooses to advertise. both Acme and Topco choose to advertise. Acme advertises, but Topco does not. Topco advertises, but Acme does not. Both advertise Acme advertises, but Topco does not Topco advertises, but Acme does notThe payoff matrix below shows the possible actions and payoffs of Walmart and Target with respect to a particular product. The non-cooperative solution occurs when: Target Price High Price Low $40 Price High $40 Price Low $50 $15 $50 $15 $30 $30 [15.4.1 Decisions, Decisions-What Price to Charge?] A Walmart prices low and Target prices high. B Walmart and Target both price high. Walmart prices high and Target prices low.. Walmart and Target both price low. Last saved 8:33:38 PM Submit4. Suppose in 1977 Honda and Toyota each have to decide whether to build an automobile plant in the North American market. The payoff matrix below shows Honda's payoff on the left, and Toyota's on the right. Is there a Nash equilibrium? If so, where, and how do you know? Тoyota Build small Don't build anything plant Build small 16, 16 20, 15 Honda plant Don't build anything 15, 20 18, 18