Hand written solutions are strictly prohibited 2. Airbus (player one) decides whether to enter airplane market. Boeing, who was until now theonly airplane-manufacturer, observes this decision. If Airbus enters, then both firms decidesimultaneously whether to advertise. Otherwise, Boeing alone decides whether to advertise. Withtwo firms in the market, each firm earns a profit of $30 million if they both advertise and $ 50million if they both do not advertise. If only one firm advertises, then it earns $ 60 million andthe other earns $ 10 million. If Boeing is solely in the industry, it earns $ 40 million if itadvertises and $ 35 million if it does not advertise. Airbus earns nothing if it does not enter.a) Please represent extensive form and the game. Draw the "game tree", and label the possibleactions of each player and don't forget to enter the payoffs at the terminal nodes.b) Please represent the strategic form of the game. Hint: Airbus has here four possible actions:Enter/Advertise; Enter/Don't advertise; Don't enter/Advertise; Don't enter/don't advertise. Yesthe third one is awkward, and we will still consider it.c) Is there any dominant or dominated strategy for any player? If so, please highlight alldominant strategies with a star and all dominated strategies with an "X" both in strategic and inextensive form.d) Assume that both players are rational, but they both DON'T know whether the other player isrational. What can you say about the outcome of the game? (keep your answer short, 1-2sentences)e) Now consider a modified Payoff of the game: If Airbus does NOT enter the market, andBoeing decides to do NO advertising, it earns $ 50 million instead of $ 35 million. What can yousay now the outcome of the game if you assume thati)both players are rational, but they both DON'T know whether the other player is rational.Sentences only)(1-2ii)both players are rational, and they both know that the other player is rational too. (1-2sentences)

A dominated strategy is an idea in game theory that alludes to a circumstance where a player has a…

2. Airbus (player one) decides whether to enter airplane market. Boeing, who was until now the only airplane-manufacturer, observes this decision. If Airbus enters, then both firms decide simultaneously whether to advertise. Otherwise, Boeing alone decides whether to advertise. With two firms in the market, each firm earns a profit of $30 million if they both advertise and $ 50 million if they both do not advertise. If only one firm advertises, then it earns $ 60 million and the other earns $ 10 million. If Boeing is solely in the industry, it earns $ 40 million if it advertises and $ 35 million if it does not advertise. Airbus earns nothing if it does not enter. a) Please represent extensive form and the game. Draw the "game tree", and label the possible actions of each player and don't forget to enter the payoffs at the terminal nodes.

2. Airbus (player one) decides whether to enter airplane market. Boeing, who was until now the only airplane-manufacturer, observes this decision. If Airbus enters, then both firms decide simultaneously whether to advertise. Otherwise, Boeing alone decides whether to advertise. With two firms in the market, each firm earns a profit of $30 million if they both advertise and $ 50 million if they both do not advertise. If only one firm advertises, then it earns $ 60 million and the other earns $ 10 million. If Boeing is solely in the industry, it earns $ 40 million if it advertises and $ 35 million if it does not advertise. Airbus earns nothing if it does not enter. a) Please represent extensive form and the game. Draw the "game tree", and label the possible actions of each player and don't forget to enter the payoffs at the terminal nodes.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

the firm faces additional shipping costs. In particular, it incurs a per unit cost of 10 for shipping output from Factory 1 to the market and a per unit cost of 5 for shipping output from Factory 2 to the market. How much does it charge per unit of output?
Average Total Cost (Dollars per bike) QQ = 100 QQ = 200 QQ = 300 QQ = 400 QQ = 500 QQ = 600 1 140 60 40 80 160 320 2 230 110 40 40 110 230 3 320 160 80 40 60 140
words about the negative/positive impacts of Corona virus (COVID19) on tourism sector in Oman
Will the long-run customer relationship and sales gains from the promotion justify its costs?
XYZ company can manufacture their own products and sells them. They are able to control the demand by changing the price that is determined by the equation below. The company is thinking of maximizing their profit. The fixed cost is $1,000 per month and the variable cost is $40 per unit. Find the number of units that must be manufactured and sold monthly to maximize profit. (Demand D in the equation is monthly) Hint: Profit = Total Revenue - Total Cost 2,700 5,000 p = $38 + D for D > 1 D2 1 Add file
Bags/Participants Fixed Cost Variable Cost Total Cost 0 $1,700 $ - $1,700 100 $1,700 $500 $2,200 200 $1,700 $1,200 $2,900 300 $1,700 $2,700 $4,400 400 $1,700 $5,200 $6,900 500 $1,700 $9,000 $10,700 600 $1,700 $15,000 $16,700 700 $1,700 $23,800 $25,500 800 $1,700 $36,800 $38,500 900 $1,700 $55,800 $57,500 1,000 $1,700 $83,000 $84,700 Given the above information on cost, if you charge $15 per entry, what is the breakeven quantity of bags that you should order? At what quantity of bags will profits be maximized? A Use the profit maximizing rule, MR ≥ MC, buy 300 bags. B Use the profit maximizing rule, MR ≥ MC, buy 200 bags. C Use Qb = F/(MR-AVC) where Qb is the breakeven quantity to be determined, the optimal quantity of bags is 300. D Use Qb = F/(MR-AVC) where Qb is the breakeven quantity to be determined, the optimal quantity of bags is 200.
(a) A manufacturer has a fixed cost of $2200 and a production cost of $ 60 for each unit produced. The price-demand function was determined to be p(x)=800-2x. (i) Derive the cost function, C(x). (i) Find the revenue function, R(x).
The 1,850 residents of Great Donut Island are all fishermen. Every morning they go to the nearest port to launch their fishing boats and then return in the evening with their catch. The residents are evenly distributed along the 20-mile perimeter of the island. Each port has a fixed cost of $1,850/day. If the optimal number of ports is 7, what must be the per mile travel cost? Instructions: Round your answer to the nearest penny (2 decimal places).
Process mapping is a tool that reduces processes to their component parts or activities and helps identify and then eliminate non-value-added activities, (waste) or delays within a process. Process mapping is valuable in purchasing, especially when attempting to streamline the flow of material or information between suppliers and a purchaser.
Distinguish between past and present designs in the light of economic efficiency
Does providing customized products generally involve less capital investment or less skilled labor, when compared to more standardized products?