FIRM B Collude Collude Produce 20m Compete Produce 35m A: $200m profits A: $300m profits B: $170m profits Produce 30m B: $300m profits A: $50m profits A: $100m profits Compete Produce 50m B: $400m profits B: $200 profits Firms A and B have a choice to compete or collude with payoffs as shown above. The equilibrium outcome is Both A and B collude A competes and B colludes Both A and B compete There is no equilibrium outcome to the game A colludes and B competes

Qd=250-2P+5Y Qs= 100-4P+2A Y=12, A=4   a. Is Qd endogenous or exogenous?  b. Is P endogenous or exogenous? c. Is A exogenous or exogenous?

8) Three decision makers have assessed utilities for the problem whose payoff table appearsbelow.s1 s2 s3d1 500 100 -400d2 200 150 100d3 -100 200 300probability.2 .6 .2Indifference Probability for PersonPayoff A B C300 .95 .68 .45200 .94 .64 .32150 .91 .62 .28100 .89 .60 .22-100 .75 .45 .10a. Plot the utility function for each decision maker.b. Characterize each decision maker's attitude toward risk.c. Which decision will each person prefer?

ONLY SOLVE D   An investor with a total wealth of $100 is faced with the following opportunities. First, he may invest $100 now and receive $144 if there are good times, but receive $64 if there are bad times. The investor estimates that good times happen with 50% probability.He can also buy an investor newsletter whether good times or bad times will occur. (a) Draw the decision tree that illustrates the options available to the investor and the payoffs to the different options. Define P as the price of the newsletter. (b) If the investor is risk-neutral with U(M) = M, where M is income, how much would he be willing to pay for the subscription to the newsletter? (c) If the investor is risk-averse with utility U(M) = M0.5, where M is income, how much would this investor be willing to pay for the subscription to the newsletter? (d) Suppose that the owner of the newsletter estimates that there are 75 risk-averse investors like those of part (c) and 25 investors like those of part(b). If…