please answer all of the questions. thank youuu If Expresso decides not to advertise, it will earn a profit of $million if Beantown advertises and a profit of $million if Beantown doesnot advertise.If Beantown advertises, Expresso makes a higher profit if it choosesIf Beantown doesn't advertise, Expresso makes a higher profit if it choosesSuppose that both firms start off not advertising. If the firms act independently, what strategies will they end up choosing?O Both firms will choose not to advertise.Expresso will choose to advertise and Beantown will choose not to advertise.Expresso will choose not to advertise and Beantown will choose to advertise.O Both firms will choose to advertise.Again, suppose that both firms start off not advertising. If the firms decide to collude, what strategies will they end up choosing?O Expresso will choose not to advertise and Beantown will choose to advertise.O Expresso will choose to advertise and Beantown will choose notadvertise.Both firms will choose not to advertise.O Both firms will choose to advertise.It might be easier for Expresso and Beantown to achieve the cooperative outcome of the game if:O The payoffs of the game were cut in halfO The game had repeated trialsThe payoffs of the game were doubledO It were difficult to monitor whether the other player was advertising Suppose that Expresso and Beantown are the only two firms that sell coffee. The following payoff matrix shows the profit (in millions of dollars) eachcompany will earn depending on whether or not it advertises:BeantownAdvertises Doesn't AdvertiseAdvertises10, 1018, 2ExpressoDoesn't Advertise2, 1811, 11For example, the upper-right cell shows that if Expresso advertises and Beantown doesn't advertise, Expresso will make a profit of $18 million, andBeantown will make a profit of $2 million. Assume this is a simultaneous game and that Expresso and Beantown are both profit-maximizing firms.If Expresso decides to advertise, it will earn a profit of S|million if Beantown advertises and a profit of $million if Beantown does notadvertise.If Expresso decides not to advertise, it will earn a profit of $million if Beantown advertises and a profit of $million if Beantown doesnot advertise.If Beantown advertises, Expresso makes a higher profit if it choosesIf Beantown doesn't advertise, Expresso makes a higher profit if it choosesSuppose that both firms start off not advertising. If the firms act independently, what strategies will they end up choosing?Both firms will choose not to advertise.Expresso will choose to advertise and Beantown will choose not to advertise.O Expresso will choose not to advertise and Beantown will choose to advertise.O Both firms will choose to advertise.Again, suppose that both firms start off not advertising. If the firms decide to collude, what strategies will they end up choosing?Expresso will choose not to advertise and Beantown will choose to advertise.Expresso will choose to advertise and Beantown will choose not to advertise.

advertises, Expresso makes a higher profit if it chooses doesn't advertise, Expresso makes a higher profit if it chooses both firms start off not advertising. If the firms act independently, what strategies will they end up choosing? ch firms will choose not to advertise. presso will choose to advertise and Beantown will choose not to advertise. presso will choose not to advertise and Beantown will choose to advertise. th firms will choose to advertise. se that both firms start off not advertising. If the firms decide to collude, what strategies will they end up choosing? presso will choose not to advertise and Beantown will choose to advertise. presso will choose to advertise and Beantown will choose not to advertise. ch firms will choose not to advertise. th firms will choose to advertise.

advertises, Expresso makes a higher profit if it chooses doesn't advertise, Expresso makes a higher profit if it chooses both firms start off not advertising. If the firms act independently, what strategies will they end up choosing? ch firms will choose not to advertise. presso will choose to advertise and Beantown will choose not to advertise. presso will choose not to advertise and Beantown will choose to advertise. th firms will choose to advertise. se that both firms start off not advertising. If the firms decide to collude, what strategies will they end up choosing? presso will choose not to advertise and Beantown will choose to advertise. presso will choose to advertise and Beantown will choose not to advertise. ch firms will choose not to advertise. th firms will choose to advertise.

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter15: Strategic Games

Section: Chapter Questions

Problem 3MC

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Sometimes oligopolies in the same industry are very different in size. Suppose we have a duopoly where one firm (Film A) is large and the other film (Film B) is small, as the prisoners dilemma box in Table 10.4 shows. Assuming that both films know the payoffs, what is the likely outcome in this case?
Suppose that Expresso and Beantown are the only two firms that sell coffee. The following payoff matrix shows the profit (in millions of dollars) each company will earn depending on whether or not it advertises: Beantown Advertise Doesn't Advertise Expresso Advertise 8, 8 15, 2 Doesn't Advertise 2, 15 11, 11 For example, the upper right cell shows that if Expresso advertises and Beantown doesn't advertise, Expresso will make a profit of $15 million, and Beantown will make a profit of $2 million. Assume this is a simultaneous game and that Expresso and Beantown are both profit-maximizing firms. If Expresso decides to advertise, it will earn a profit of million if Beantown advertises and a profit of million if Beantown does not advertise. If Expresso decides not to advertise, it will earn a profit of million if Beantown advertises and a profit of million if Beantown does not advertise. If Beantown advertises, Expresso makes a higher profit if…
high low high 11, 11 2,18 low 18, 2 10,10 Suppose there are only two firms that sell tablets: Padmania and Capturesque. The following payoff matrix shows the profit (in millions of dollars) each company will earn, depending on whether it sets a high or low price for its tablets. For example, the lower-left cell shows that if Padmania prices low and Capturesque prices high, Padmania will earn a profit of $18 million, and Capturesque will earn a profit of $2 million. Assume this is a simultaneous game and that Padmania and Capturesque are both profit-maximizing firms. If the firms do not collude, what strategies will they end up choosing? 1. Padmania will choose a low price, and Capturesque will choose a high price. 2. Both Padmania and Capturesque will choose a high price. 3. Padmania will choose a high price, and Capturesque will choose a low price. 4. Both Padmania and Capturesque will choose a low price. True or False: The…
suppose there are only two firms that sell tablets: Padmania and Capturesque. The following payoff matrix shows the profit (in millions of dollars) each company will earn, depending on whether it sets a high or low price for its tablets. Capturesque Pricing High Low Padmania Pricing High 11, 11 2, 18 Low 18, 2 10, 10 For example, the lower-left cell shows that if Padmania prices low and Capturesque prices high, Padmania will earn a profit of $18 million, and Capturesque will earn a profit of $2 million. Assume this is a simultaneous game and that Padmania and Capturesque are both profit-maximizing firms. If Padmania prices high, Capturesque will make more profit if it chooses a ______ price, and if Padmania prices low, Capturesque will make more profit if it chooses a _____ price. If Capturesque prices ______ high, Padmania will make more profit if it chooses a price, and if Capturesque prices low, Padmania will make more profit if it chooses a _____…
Suppose that two firms, Lucky Bird and Full Coop, are the only sellers of seitan buffalo wings 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: Full Coop Advertise Doesn't Advertise Lucky Bird Advertise 9, 9 15, 3 Doesn't Advertise 3, 15 11, 11 For example, the lower left cell of the matrix shows that if Full Coop advertises and Lucky Bird does not advertise, Full Coop will make a profit of $15 million, and Lucky Bird will make a profit of $3 million. Assume this is a simultaneous game and that Lucky Bird and Full Coop are both profit-maximizing firms. If Lucky Bird chooses to advertise, it will earn a profit of million if Full Coop advertises and a profit of million if Full Coop does not advertise. If Lucky Bird chooses not to advertise, it will earn a profit of million if Full Coop advertises and a profit of million if…
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: Dairy King Advertise Doesn’t Advertise Creamland Advertise 10, 10 18, 2 Doesn’t Advertise 2, 18 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 $18 million, and Dairy King will make a profit of $2 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_____million if Dairy King advertises and a profit of______million if Dairy King does not advertise. If Creamland decides not to advertise, it will earn a profit of_______million if Dairy King advertises and a profit of______million if Dairy King does not advertise. If Dairy King…
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: Dairy King Advertise Doesn't Advertise Creamland Advertise 10, 10 18, 2 Doesn't Advertise 2, 18 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 $18 million, and Dairy King will make a profit of $2 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 _________ million if Dairy King advertises and a profit of ________ million if Dairy King does not advertise. If Creamland decides not to advertise, it will earn a profit of __________ million if Dairy King advertises and a profit of _________…
Two farmers have unlimited access to a common plot of land and can let their cows graze on it. The matrix below shows the benefits they get from grazing either 1 or 2+ cows on the land. Farmer 2 Farmer1 1 cow 2+ cows 1 cow 8,8 2,10 2+cows 10,2 4,4 What kind of game is this? What is/are the Nash equilibrium/equilibria? What is/are the Pareto efficient outcome(s) in this game? (Hint: Remember that Pareto efficiency occurs when no one person can be made better off without someone else being made worse off) The government offers a reward or subsidy for communities where farmers only allow 1 cow to graze on the common field, resulting in a new payoff matrix:…
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