Guy and Cole are racing to develop a new brand of tooth whitener. They both believe that it will be more effective than all others. Guy and Cole know that if they both develop the new product, they will make zero economic profit, if only one of them develops the new product, that firm will make an economic profit of $1.5 million a week and the other will incur an economic loss of $1.5 million a week, and if neither of them develops the new product, both will make an economic profit of $1.0 million. Construct a payoff matrix for the game that Guy and Cole must play. >>> The numbers in the matrix are in millions of dollars. Do not enter a dollar sign. >>> If the firm incurs an economic loss, indicate the loss with a minus sign. If the firm makes an economic profit, do not include a plus sign
Q: P SB E H F III G 50 80 120 150 Consider the market for education. Education has an external benefit.…
A: Externalities are the side effects which are borne by the parties who are not directly involved in…
Q: Resources are allocated efficiently when a. the exchange value of the resources to demanders equals…
A: Allocative efficiency maximises surplus because resources are allocated in such a way that living…
Q: An economy is currently at it's steady state. Their depreciation rate is 10.5% and their capital…
A: Since you have posted multiple question, we will solve the first one for you. If you want any…
Q: What important function do institutions serve for economic development? O They assign resources to…
A: 1. The answer is - They regulate innovation and research. Explanation The impact of institutions on…
Q: In terms of total number of businesses by form of ownership, corporations are more common than sole…
A: A corporation is a sort of business entity that is owned by a group of individuals but is legally…
Q: Exercise Suppose you are the governor of the Central Bank, and you carry out an inflation targeting…
A: Answer: Inflation refers to the general increase in the price level in the economy. The central bank…
Q: Suppose that, at a quantity of q = 20, a firm's costs are as follows: MC = 20, AVC = 12, ATC = 30.…
A: In economics AVC is basically determined as the total firms variable costs which is merely divided…
Q: g) The net gain to society created by this market is $__________.
A: The "social surplus" is the sum of consumer and producer surpluses. The total surplus is more than…
Q: 3. Average Fixed Cost is the a. horizontal distance (at any particular cost level) between ATC and…
A: A company's total cost is divided into fixed and variable costs. A "fixed cost" remains constant…
Q: Guitars 100 25 75 100 50 Ukuleles In the above figure, the opportunity cost of moving from producing…
A: The next best alternative is frequently referred to as opportunity cost. It's also known as the…
Q: Assume the following: Spot USDBRL = 5.0500 1YR USD Money Market Rates = 1.50%…
A: The spot rate is otherwise called the money cost since this can be traded for cash today. A forward…
Q: Suppose that when your income is $45, the price of ice cream cones is $1.50, and the price of…
A: Initially Price of ice cream =$1.50 and total icecream consumed = 12 The price of churros is $3…
Q: company mines 420,000 tons of coal per year in a rural county. The coal is worth $63 per ton. The…
A: Average price of a 2,000-square foot house with three bedrooms more than 20 km away from mining site…
Q: If you look at almost any national news outlet, you will see that many of the articles involve…
A: Globalization: It refers to the increase in the level of exchange between the economies.…
Q: A new bridge with an infinite life is expected to have a first cost of $ 59.1 million. It will have…
A: The yearly worth or annual worth is the net of the multitude of advantages and costs caused more…
Q: Question 1 Given the following information: 1 = 150, G = 150, T-150 and C = 150 +0.75(Yd) Which of…
A: At the equilibrium Y = AE where AE is Aggregate expenditure And AE = C + I + G Y = C + I+ G when…
Q: Apple cider is produced in a perfectly competitive market. Firms are identical and all have the…
A: Introduction Apple cider has produced in a perfectly competitive market. Cost and market demand of…
Q: In the country of Solow, people buy only three things: food, rent, and luxury goods. Last year, the…
A: Answer: It is given that the price of luxury goods went down and the price of rent increased 5%. The…
Q: Pencils Oranges Price (Dollars per orange) 1 Quantity (Number of orang 165 225 175 Price Quantity…
A: Real GDP fixes the price level at base year. It is not affected by changes in price level.
Q: A city is spending $20 million on a new sewage system. The expected life of the system is 200 years,…
A: To calculate capitalized cost we first have to calculate the annual worth. Given, useful life=200…
Q: For each of the regions listed in the following table, use the midpoint method to identify if the…
A:
Q: A country has a Cobb-Douglas production function given by: Y = AK0.5 0.3 If total factor…
A: Since you have asked multiple questions, we will solve first question you. If you want any other…
Q: A firm is producing 1,000 units at a total cost of $5,000. If it were to increase production to…
A: In the mentioned question we have given total cost of 1000 units and 1001 units and asked about the…
Q: In the Solow model, if y-f(k)-Ak05. A-5, s-0.2, n-0, and d-0.1. The capital stock changes according…
A: Equilibrium is achieved where investment equals breakeven investment.
Q: Your company is selling some real estate that they need to offload to generate some cash and they…
A: Given the information: For option A, the cash inflow at present = $1000000 Cash inflow one year from…
Q: The following table relates to Country Jamrock Items Amount ($ millions) Wages and salaries 500…
A: The difference between a government's revenues (taxes and proceeds from asset sales) and its…
Q: 5. In a floating exchange rate regime between Japan and the U.S, what happens to the dollar in the…
A: A floating exchange rate is an exchange rate framework where a country's money not entirely settled…
Q: Chemco Enterprises is the manufacturer of Ultra-Dry, a hydrophobic coating that will waterproof…
A: Given, Initial cost (P) = 32,000 Net annual revenue (A) = 29,000 - 18,000 = 11,000 Salvage…
Q: A new bridge with an infinite life is expected to have a first cost of $ 59.1 million. It will have…
A: Recognizing the Annual Cost Equivalent (EAC) Aside from capital planning, equivalent annual cost…
Q: Consider a monopolist facing an inverse demand of P=30-24 and possesing a total cost function of…
A: As given Inverse demand function is P = 30 -2q Total cost function is C(q) = 2q In the monopolist…
Q: 1. Consider a two-person, two-commodity, pure exchange economy with: Un = giga, Un =q12, 911…
A: The contract curve is defined as that part of the Pareto set where both consumers do at least as…
Q: When the marginal value of eating the fifth unit of a good is 6 and the overall utility of all five…
A: value refers to the entire pleasure derived from the use of a product or service. Consumers are…
Q: The elementary school has one candy machine in the cafeteria. Candy at the vending machine costs…
A: An indifference curve, with respect to two commodities, is a graph showing those combinations of the…
Q: Country A produces GDP according to the following equation: GDP = 5√K and has a capital stock of…
A: Gross domestic product is the sum of the market values of all the goods and services produced…
Q: Explain how the market demand curve for a ‘normal’ good will shift (i.e. left, right or no shift) in…
A: In a market for a normal good, the change in demand will lead to shift the demand curve to the left…
Q: The Federal Reserve buys $20.00 million in Treasury securities. If the required reserve ratio is…
A: Given Required reserve ratio rr = 25% excess reserve ratio er = 10% part (a) When Federal Reserve…
Q: On a graph, draw the graph for the money market and show what will happen to the equilibrium real…
A: Federal Reserve is the central bank that manages the flow of money in the economy.
Q: Economics Please help. I have been struggling with this question. showroom. He needs the dealership…
A: Hi! Thank you for the question, As per the honor code, we are allowed to answer three sub-parts at a…
Q: Question 7 The C.P.I. INCLUDES which of the following? O a. Soldier uniforms, Congressional…
A: When talking about consumer price index, the term itself depicts the measurement of inflation using…
Q: advantage can also be The comparative demonstrated with agents rather than countries. Let's say that…
A: Comparative advantage refers to the ability to produce goods and services at a lower opportunity…
Q: Consider the standard Ramsey model with endogenous labor supply. Assume that the house- hold has a…
A: A person generally has two choices while deciding how to spend the time. The time can either be…
Q: Price 00000 Price 0 RAWU > A Quantity The market for plastic bottles is currently in equilibrium at…
A: Equilibrium point is the situation where demand and supply curve for goods intersect at certain…
Q: Provide specific real life example (Quanti and quali data) for equilibrium prices and quantity
A: Demand and supply are two market forces which determine the price and quantity level . Market…
Q: Predict how each of the following economic changes will affect the financial market for home loans.…
A: A demand curve can shift so that more or less of the commodity would be demanded as at any commodity…
Q: in the Solow model, if y-fk-AA-5s-02-0, and d-0.1. The capital stock changes according to the…
A: Equilibrium is reached at the steady state when rate of change in capital per worker is zero.
Q: When interest rates in the U.S. increase, we could expect: Multiple Choice more foreigners…
A: Foreign investors gain considerable ownership stakes in domestic enterprises and assets due to these…
Q: If short-run equilibrium output equals 10,000, the income-expenditure multiplier equals 10, the mpc…
A: Here, given information is, Real output: 10,000 Income-expenditure multiplier: 10 MPC: 0.9…
Q: Figure 1 below shows the cross-country correlation between the development of the education system…
A: In the above diagram, there is an upward sloping curve which shows the highly positive correlation…
Q: Use the linear demand and supply curves shown below to answer the following questions.You must show…
A: Answer: According to the above figure, the equilibrium occurs at point E. The corresponding…
Q: Required information The NFL should update its online security systems now at a cost of $3.6 million…
A: Inflation is the pace of expansion in prices over a given timeframe. Inflation is commonly a wide…
1
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
- Suppose Toyota and Honda must decide whether to make a new kind of side-impact airbags standard equipment on all models. Side impact-airbags raise the price of each automobile by $1000. If both firms make side-impact airbags standard equipment, each company will earn profits of $2.5 billion. If neither company adopts the side-impact airbag technology, each company will earn $1 billion (due to lost sales to other automakers). If one company adopts the technology as standard equipment and the other does not, the adopting company will earn a profit of $3 billion and the other company will lose $1.5 billion. If you were a decision maker at Honda, would you make side-impact airbags standard equipment?Suppose Toyota and Honda must decide whether to make a new breed of side-impact airbags standard equipment on all models. Side-impact airbags raise the price of each automobile by $1,000. If both firms make side-impact airbags standard equipment, each company will earn profits of $2.5 billion. If neither company adopts the side-impact airbag technology, each company will earn $1 billion (due to lost sales to other automakers). If one company adopts the technology as standard equipment and the other does not, the adopting company will earn a profit of $3 billion and the other company will lose $1.5 billion. If you were a decision maker at Honda, would you make side-impact airbags standard equipment? Explain.Suppose Toyota and Honda must decide whether to make a new breed of side-impact airbags standard equipment on all models. Side-impact airbags raise the price of each automobile by $1,000. If both firms make side-impact airbags standard equipment, each company will earn profits of $0.5 billion. If neither company adopts the side-impact airbag technology, each company will earn $1.5 billion. If one company adopts the technology as standard equipment and the other does not, the adopting company will earn a profit of $2 billion and the other company will earn $-1 billion.If you were a decision maker at Honda, would you make side-impact airbags standard equipment?multiple choice 1 There is not enough information to answer the question. No Yes If Toyota and Honda were able to cooperate, would you expect this same outcome?multiple choice 2 Yes No There is not enough information to answer the question.
- Two oligopolistic firms have to decide on the pricing strategy. Each can either choose either a high or a low price. If they both choose a high price, each will make $12 million, but if they both choose a low price, each will make $ 8 million. If one sets a high price and other a low one, the low-priced firm will make $16 million, but the high-priced firm will make only $4 million. It is illegal for each firm to communicate with each other. a) Which strategy would both of them ultimately opt for? b) What would be the pay-off for this strategy?Q13 George and Jerry are competitors in a local market. Each is trying to decide if it is better to advertise on TV, on radio, or not at all. If they both advertise on TV, each will earn a profit of €3,000. If they both advertise on radio, each will earn a profit of €5,000. If neither advertises at all, each will earn a profit of €10,000. If one advertises on TV and the other advertises on radio, then the one advertising on TV will earn €4,000 and the other will earn €2,000. If one advertises on TV and the other does not advertise, then the one advertising on TV will earn €8,000 and the other will earn €5,000. If one advertises on radio and the other does not advertise, then the one advertising on radio will earn €9,000 and the other will earn €6,000. If both follow their dominant strategy, then George will: (a) advertise on TV and earn €3,000; (b) advertise on radio and earn €5,000; (c) advertise on TV and earn €8,000; (d) not advertise and earn €10,000;q19 If you advertise and your rival advertises, you each will earn $4 million in profits. If neither of you advertises, you will each earn $10 million in profits. However, if one of you advertises and the other does not, the firm that advertises will earn $1 million and the non-advertising firm will earn $5 million. If you and your rival plan to be in business for 10 years, then the Nash equilibrium is a. for each firm to not advertise in any year. b. for neither firm to advertise in early years but to advertise in later years. c. for each firm to advertise every year. d. for each firm to advertise in early years but not advertise in later years.
- In the market for video game consoles, Microsoft and Sony are essentially a duopoly, with Nintendo at a distant third. Consider a purely hypothetical game in which the executives of the two companies are deciding how much they will spend on advertising. To simplify, assume that they can either spend a lot or spend a little. If both firms spend a lot, Sony's hypothetical profit will be $2 billion and Microsoft's hypothetical profit will be $1 billion. If they both spend a little, Sony's profit will be $9 billion and Microsoft's profit will be $7 billion. If Sony spends a lot and Microsoft spends a little, Sony's profit will be $8 billion and Microsoft's profit will be $2 billion. Finally, if Sony spends a little and Microsoft spends a lot, Sony's profit will be $3 billion and Microsoft's profit will be $6 billion. Create the payoff matrix for this game. Does Sony have a dominant strategy? If so, what is it? Does Microsoft have a dominant strategy? If so, what is…Suppose that an oligopolistic is charging $21 per unit of output and selling 31 units each day. What is its daily total revenue? Also suppose that previously it had lowered its price from $21 to $19, rivals matched the price cut, and the firmâs sales increased from 31 to 32 units. It also previously raised its price from $21 to $23, rivals ignored the price hike, and the firmâs daily total revenue came in at $482. Which of the following is most logical to conclude? The firmâs demand curve is (a) inelastic over the $21 to $23 price range, (b) elastic over the $19 to $21 price range, (c) a linear(straight) down sloping line, or (d) a curve with a kink in it?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: (base to table) 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 $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 advertises, Creamland makes a higher profit if it chooses (to…
- q52 If you advertise and your rival advertises, you each will earn 14 million in profits. If neither of you advertises, you will each earn 20 million in profits. However, if one of you advertises and the other does not, the firm that advertises will earn 10 million and the non-advertising firm will earn 16 million. If you and your rival plan to be in business for only one year, the Nash equilibrium is a. for each firm to advertise. b. for the other firm to advertise and your firm not to advertise. c. for your firm to advertise and the other not to advertise. d. for neither firm to advertise.There is a Jexaco gas station right across the street from a Jalero station in Pennsylvania It is safe to assume that they compete locally for the same consumers and can observe the prices posted on each other's marquees. Demand for gasoline in this local market is Q = 80 − 6P, and both stations obtain gasoline from their supplier at $2.20 per gallon. On the day that both franchises opened for business, each owner was observed changing the price of gas advertised on its marquee more than 10 times; the owner of Jexaco lowered its price to slightly undercut Jalero's price, and the owner of Jalero lowered its price to beat Jexaco's. Since then, prices appear to have stabilized. Which of the oligopoly models is most suitable for explaining this behavior by these firms? Under current conditions, how many gallons of gasoline are sold in the market, and at what price? Would your answer differ if Jalero had service attendants available to fill consumers' tanks but Jexaco was only a…Two cigarette manufacturers repeatedly play the following simultaneous-move billboard advertising game. If both advertise, each earns profits of $0 million. If neither advertises, each earns profits of $10 million. If one advertises and the other does not, the firm that advertises earns $20 million and the other firm loses $1 million. If there is a 10 percent chance that the government will ban cigarette sales in any given year, can the firms “collude” by agreeing not to advertise?