2.aShow that if Firm E does not update its belief, its optimal choice isentering this market.Next, we investigate if Firm I is low-cost (c = 0), whether it can signal Firm E thisinformation by setting a particular level of p1. Suppose there is only 1 consumer who has a demand of a product up to 1 unit perperiod. There are 2 periods. Her willingness to pay is S10 per unit.There are two firms, I and E. Firm I is the incumbent and is the only producer inthe 1" period. Firm E is the potential entrant with 0 marginal cost but must incuran entry cost of $1 if entering this market.Firm I knows its marginal cost (c) but Firm E does not know for sure: it knows c iseither 0 or 5. Without any further information/signal, Firm E believes theprobability for either case is 50%.The timing of the game is the following:• Firm I sets the price in the 1ª" period (pi);• Firm E makes its entry decision;• Were “not enter" chosen, Firm I will remain as a monopoly in the 2ndperiod and set the price at $10.• Were "enter" chosen, the two firms engage in Bertrand competition in the2nd period.Lastly, assume both firms have a discount factor of 0.8.

Given that, Price to pay for order by customer 1, price=$10 per unit. There are two firms I and E.…

Answered: 2.a Show that if Firm E does not update…

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

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27) When interacting two continuous variables in a non-linear specification, then the effect for an increase in one of the two variables: A) will be the same regardless of the value of that variable. B) will depend on the level of the variable and the amount of change in the other variable. C) cannot be calculated since the specification is nonlinear. D) depends on the level of the other control variables. 28) In general, the test statistic has the following form:
2. Recent studies have allowed psychologists to establish definite links between specific foods and specific brain functions. For example, lecithin has been shown to increase the concentration of certain brain chemicals that help regulate memory and motor coordination. An experiment was conducted that involves two separate samples of newborn rats. The ten rats in the first sample are given a diet with standard amounts of lecithin. The five rats in the second sample are fed a special diet, which contains almost no lecithin. After 6 months, each rat is tested on a specially designed learning problem that requires both memory and motor coordination. The score for each animal is the number of errors it made before solving the learning problem.
A manufacturing company employs two devices to inspect output for quality control purposes. The first device is able to accurately detect 99.3% of the defective items it receives, whereas the second is able to do so in 99.7% of the cases. Assume that four defective items are produced and sent out for inspection. Let X and Y denote the number of items that will be identified as defective by inspecting devices 1 and 2, respectively. Assume that the devices are independent. Determine fxy(X=4,Y=3). Determine fxy(X=3,Y=4). Determine fxy(X=4,Y=4).
1.
a production line is producing light bulbs. 90% of the bulbs are good and .10% are defective. Suppose each bulbls condition is dependent of the other bulbs condition Select three buls at randon: 1. P(all 3 are good)=? 2. P( 2 of 3 are good)= 3. P(1 of 3 are good)=
What is the optimal time for a scuba diver to be on the bottom of the ocean? That depends on the depth of the dive. The U.S. Navy has done a lot of research on this topic. The Navy defines the "optimal time" to be the time at each depth for the best balance between length of work period and decompression time after surfacing. Let x = depth of dive in meters, and let y optimal time in hours. A random sample of divers gave the following data. 15.1 23.3 32.2 38.3 51.3 20.5 22.7 2.48 2.38 1.48 1.03 0.75 2.38 2.20 (a) Find Ex, Ey, Ex², Ey², Exy, and r. (Roundr to three decimal places.) Ex = 203.4 Ey = 12.7 Ex2 = 0.001 Ey? = 0.002 Exy = 931.638 r= -0.9655 (b) Use a 1% level of significance to test the claim that p < 0. (Round your answers to two decimal places.) t = -8.29 critical t = -3.36 Conclusion O Reject the null hypothesis. There is insufficient evidence that p < 0. Reject the null hypothesis. There is sufficient evidence that p < 0. Fail to reject the null hypothesis. There is…
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2.a Show that if Firm E does not update its belief, its optimal choice is entering this market. Next, we investigate if Firm I is low-cost (c = 0), whether it can signal Firm E this information by setting a particular level of p1.