Two firms producing identical products may merge due to the existence on Multiple Choice O economies of scope. economies of scele cost complementarities All of the sta are comect
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- Consider a small town with two competing restaurants: Doug’s Diner and Betty’s Bistro. There is 1000profit to be made in the market. Each period, the restaurants simultaneously decide whether to offer high orlow quality food. In order to offer high quality food, each restaurant must hire an expert chef, which incursan additional cost of 100. The restaurants split the profit equally if they offer the same quality of food. Ifone restaurant offers high quality food while the other offers low quality food, the high quality restauranttakes four fifths of the profit and the low quality restaurant takes one fifth of the profit.(a) Draw up the normal form game matrix, showing the players, strategies, and payoffs.(b) Determine the Nash equilibrium of this game.(c) Explain how the restaurant owners could both be better off than in the Nash equilibrium if they wereable to cooperate. Is the town as a whole better off or worse off when the firms cooperate? Why or whynotCOURSE: MICROECONOMICS - Stackelberg ModelIn a given market good there are only 2 firms that satisfy the demand, and their respective total cost functions are: CTi = 400 and the demand that is estimated is P = 120 - 2QIf the exception variable of both firms is the quantity they will produce, such that the decisions to produce are made sequentially firm number 1 will be the leader who decides the quantity to produce and firm number 2 (follower) decides based on the production of firm number 1, we ask:(a) quantity produced by each firm and its equilibrium price in the market.(b) Profit of each company at equilibrium and (c) Graph your resultsLogitech earned a profit of Rs 200 for selling 5 CDs having cost of production as Rs 50. What could be the price of one CD? (no pic required solve here completely, if possible)Required to answer. Multi Line Text. Due to COVID-19 industries are shut down in most of the countries and they are either producing nothing or minimum out put during lock down. Does it effect fixed and variable costs both? elucidate.Required to answer. Multi Line Text. How is prisoner’s dilemma game similar to a cartel?Required to answer. Multi Line Text.
- Answer both please otherwise we will give dounvoteAs the new general manager of the Grand Palladium Jamaica luxury all-inclusive resort, youare assessing your pricing policies. Currently, the price of a weekend stay is $2,000 perguest. You estimate the marginal cost of serving a guest at $1,600, and while yourpredecessor unfortunately did not leave you data from the pricing experiments and testmarketing she performed, you do know that such experiments were done, and that yourpredecessor was competent.a. What is your best estimate of the elasticity of demand for a weekend stay at the GrandPalladium?b. Your learned that at the current price, the resort is only 80% full on the weekends.Remembering the sense of belonging that you experienced in a crowded subway duringthe rush hour, you contemplate lowering the price so the resort is completely full. What isyour back-of-the-envelope calculation for how much you need to lower the price?c. After some thought you cooled to the idea of full occupancy. Instead, you focused yourenergy and…(a) Calculate the rationalizable set R (b) Find all Nash equilibria (c) Find all mixed-strategy Nash equilibria fast
- Dont answer will give downvote strict warning Nash Equilibrium is Group of ariswer choices a strategy that must appear in every game, the best strategy for a player to follow only if other players are cooperative a strategy that leads to one player's interests dominating the interests of the other players, a situation where no person has an incentive to change their strategy unless someone else changes theirsA local company is planning to manufacture and market a four-slice toaster. For this toaster, the research department’s estimates are aweekly demand of 300 toasters at a price of $25 per toaster and a weekly demand of 400 toasters at a price of $20. The financial department’s estimates are fixed weekly costs of$5,000 and variable costs of $5 per toaster. a) Assume that the relationship between price ? and demand ? is linear. Use the research department’s estimates to express ? as a function of ? and determine the domain of the function. b) Using your knowledge from Finite Math, determine the Revenue function in terms of ?. c) Determine the Marginal Revenue at 2 different production levels for example 250 and 500 units. Interpret these results. (HINT: Consider what a positive or negative first derivative implies) d) Assume that the cost function is linear. Use the financial department’s estimates to express the cost function interms of ?. e) Determinethe Marginal costand interpret the…There are two firms, A and B, located on a mile stretch. Firm A has a marginal cost=$4, and Firm B has a marginal cost=$6. For both: N=potential clients in the area=4,000 V=max willingness to pay=$40 travel cost=$8/1mile Please find the best response functions for both firms and graph them.
- While grading a final exam, an economics professordiscovers that two students have virtually identical answers.She is convinced the two cheated but cannot prove it. The professorspeaks with each student separately and offers the followingdeal: Sign a statement admitting to cheating. If both studentssign the statement, each will receive an “F” for the course. Ifonly one signs, he is allowed to withdraw from the course whilethe other student is expelled. If neither signs, both receive a “C”because the professor does not have sufficient evidence to provecheating.a. Draw the payoff matrix.b. Which outcome do you expect? Why?Scenario: In the town of Isoville there are two grocery stores: Alfonso’s Ammenities and Bernice’s Bargains. The grocery stores are located at either end of the town, 1km apart. Recently, the manager of Alfonso’s Ammenities has proposed installing new self-service checkout technology, which promises to reduce the cost of each transaction at the grocery store by reducing staffing costs. The new technology is expected to reduce the marginal cost of selling a typical basket of groceries by $3. However, experience in other locations has shown that in about 25% of installations the self-service technology results in a significant increase in shop-lifting. In these cases, the need to hire extra security staff means that the marginal cost of a typical basket only falls by $1.50. Unfortunately, there is no way to know whether extra security will be required until after the new checkouts are installed. The Market: Isoville has 12,000 households, each of which purchases 1 basket of groceries per…Scenario: In the town of Isoville there are two grocery stores: Alfonso’s Ammenities and Bernice’s Bargains. The grocery stores are located at either end of the town, 1km apart. Recently, the manager of Alfonso’s Ammenities has proposed installing new self-service checkout technology, which promises to reduce the cost of each transaction at the grocery store by reducing staffing costs. The new technology is expected to reduce the marginal cost of selling a typical basket of groceries by $3. However, experience in other locations has shown that in about 25% of installations the self-service technology results in a significant increase in shop-lifting. In these cases, the need to hire extra security staff means that the marginal cost of a typical basket only falls by $1.50. Unfortunately, there is no way to know whether extra security will be required until after the new checkouts are installed.The Market: Isoville has 12,000 households, each of which purchases 1 basket of groceries per…