Steve and Michelle are farmers who sell their surplus manure to other local farmers. Manure is sold by the cubic yard. (Dirt, soil, mulch etc. are often sold by this measurement.) Steve and Michelle have no costs of production. (Buyers come andpick up their manure themselves.) Market demand is given as P = 96 - 4Q, MR = 96 - 8Q, and MC = ATC = 0. Complete parts a through d below......a) If Steve and Michelle agree to split the monopoly outcome, how much would each farmer produce and what would be the individual profits?Each farmer would produce 6 cubic yard(s). The profit for each farmer would be $ 288b) Suppose Steve decides to cheat on the agreement and produces 7 cubic yards. What is Steve's profit now? What is Michelle's profit now?Steve's profit is now $Michelle's profit is now $c) Suppose Michelle considers retaliation and thinks about producing 7 cubic yards. What would her and Steve's profits be in this case? Should Michelle retaliate?In this case, Michelle's profit would be $and Steve's profit would be $Michelleretaliate.d) Illustrate the Nash equilibrium as a prisoner's dilemma matrix.Complete the prisoner's dilemma matrix below.should notSteve's DecisionProduce 6PrshouldProduce 6Michelle'sDecision($, $Produce 7 Steve and Michelle are farmers who sell their surplus manure to other local farmers. Manure is sold by the cubic yard. (Dirt, soil, mulch etc. are often sold by this measurement.) Steve and Michelle have no costs of production. (Buyers come andpick up their manure themselves.) Market demand is given as P = 96 - 4Q, MR = 96 - 8Q, and MC = ATC = 0. Complete parts a through d below......a) If Steve and Michelle agree to split the monopoly outcome, how much would each farmer produce and what would be the individual profits?Each farmer would produce 6 cubic yard(s). The profit for each farmer would be $ 288b) Suppose Steve decides to cheat on the agreement and produces 7 cubic yards. What is Steve's profit now? What is Michelle's profit now?Steve's profit is now $Michelle's profit is now $c) Suppose Michelle considers retaliation and thinks about producing 7 cubic yards. What would her and Steve's profits be in this case? Should Michelle retaliate?In this case, Michelle's profit would be $and Steve's profit would be $Michelleretaliate.d) Illustrate the Nash equilibrium as a prisoner's dilemma matrix.Complete the prisoner's dilemma matrix below.Steve's DecisionProduce 6Produce 7Produce 6$$Michelle'sDecision(s $)Produce 7

Steve and Michelle are farmers who sell their surplus manure to other local farmers. Manure is sold by the cubic yard. (Dirt, soil, mulch etc. are often sold by this measurement.) Steve and Michelle have no costs of production. (Buyers come and pick up their manure themselves.) Market demand is given as P= 96 - 4Q, MR = 96 - 8Q, and MC = ATC = 0. Complete parts a through d below. a) If Steve and Michelle agree to split the monopoly outcome, how much would each farmer produce and what would be the individual profits? Each farmer would produce 6 cubic yard(s). The profit for each farmer would be $ 288. b) Suppose Steve decides to cheat on the agreement and produces 7 cubic yards. What is Steve's profit now? What is Michelle's profit now? Steve's profit is now $. Michelle's profit is now $ c) Suppose Michelle considers retaliation and thinks about producing 7 cubic yards. What would her and Steve's profits be in this case? Should Michelle retaliate? In this case, Michelle's profit would be $ and Steve's profit would be $. Michelle V retaliate. d) Illustrate the Nash equilibrium as a prisoner's dilemma matrix. Complete the prisoner's dilemma matrix below. should not

Steve and Michelle are farmers who sell their surplus manure to other local farmers. Manure is sold by the cubic yard. (Dirt, soil, mulch etc. are often sold by this measurement.) Steve and Michelle have no costs of production. (Buyers come and pick up their manure themselves.) Market demand is given as P= 96 - 4Q, MR = 96 - 8Q, and MC = ATC = 0. Complete parts a through d below. a) If Steve and Michelle agree to split the monopoly outcome, how much would each farmer produce and what would be the individual profits? Each farmer would produce 6 cubic yard(s). The profit for each farmer would be $ 288. b) Suppose Steve decides to cheat on the agreement and produces 7 cubic yards. What is Steve's profit now? What is Michelle's profit now? Steve's profit is now $. Michelle's profit is now $ c) Suppose Michelle considers retaliation and thinks about producing 7 cubic yards. What would her and Steve's profits be in this case? Should Michelle retaliate? In this case, Michelle's profit would be $ and Steve's profit would be $. Michelle V retaliate. d) Illustrate the Nash equilibrium as a prisoner's dilemma matrix. Complete the prisoner's dilemma matrix below. should not

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter2: Fundamental Economic Concepts

Section: Chapter Questions

Problem 1E: For each of the determinants of demand in Equation 2.1, identify an example illustrating the effect...

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