(1) Patricia owns a cleaning business with Sarah. They both have other jobs and are trying to determine the number of hours to work at the cleaning business. The following payoff matrix shows their daily incomes depending on the number of hours they work at the cleaning business. If Patricia chooses to work full time and Sarah works part time, what will each earn in daily income? A-Patricia will earn $60; Sarah will earn $60. B-Patricia will earn $50; Sarah will earn $80. C-Patricia will earn $80; Sarah will earn $50. D-Patricia will earn $55; Sarah will earn $55. E-Indeterminate
(1) Patricia owns a cleaning business with Sarah. They both have other jobs and are trying to determine the number of hours to work at the cleaning business. The following payoff matrix shows their daily incomes depending on the number of hours they work at the cleaning business.
If Patricia chooses to work full time and Sarah works part time, what will each earn in daily income?
A-Patricia will earn $60; Sarah will earn $60. B-Patricia will earn $50; Sarah will earn $80.
C-Patricia will earn $80; Sarah will earn $50. D-Patricia will earn $55; Sarah will earn $55.
E-Indeterminate
(2) Company A and Company B are each telecommunications manufacturers. Both companies manufacture the same products, and they make their decisions based on the other's actions. Both companies are considering opening retail outlets to increase their profits. The payoff matrix shows the profits of the companies in millions of dollars if they choose to open retail outlets.
The government imposes a new $5 million tax to open retail outlets. What is the expected outcome of the new payoff matrix, given the tax?
A-The Nash equilibrium is for Company A to not open retail outlets and for Company B to open retail outlets.
B-The Nash equilibrium is for Company A to open retail outlets and for Company B to not open retail outlets.
C-The Nash equilibrium is for both Company A and Company B to open retail outlets.
D-The Nash equilibrium is for both Company A and Company B to not open retail outlets.
E-There is no Nash equilibrium after the change given in the scenario.
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