Suppose Bert and Ernie are the only two fishermen who fish in Lake Sesame. Each must choose between fishing for 20 hours per week or for 40 hours per week. If both choose to fish for 20 hours per week, then each can earn a profit of $2,000 per week. If both choose to fish for 40 hours per week, then each can earn a profit of $1,500 per week. If Bert fishes for 40 hours per week, and Ernie fishes for 20 hours per week, then Bert can earn a profit of $3,000 per week, and Ernie can earn a profit of $1,000 per week. If Ernie fishes for 40 hours per week, and Bert fishes for 20 hours per week, then Ernie can earn a profit of $3,000 per week, and Bert earns a profit of $1,000 per week.

Suppose Bert and Ernie are the only two fishermen who fish in Lake Sesame. Each must choose between fishing for 20 hours per week or for 40 hours per week. If both choose to fish for 20 hours per week, then each can earn a profit of $2,000 per week. If both choose to fish for 40 hours per week, then each can earn a profit of $1,500 per week. If Bert fishes for 40 hours per week, and Ernie fishes for 20 hours per week, then Bert can earn a profit of $3,000 per week, and Ernie can earn a profit of $1,000 per week. If Ernie fishes for 40 hours per week, and Bert fishes for 20 hours per week, then Ernie can earn a profit of $3,000 per week, and Bert earns a profit of $1,000 per week.

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

Chapter16: Bargaining

Section: Chapter Questions

Problem 8MC

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