32.23 Millie Bush has written a best-seller. Revenues net of production costs are $3007¹/341/3 where T is the number of publicity trips Millie takes and A is the number of ads for the book that appear. Millie has to pay for all of her own publicity trips, which cost $100 each. Her publisher pays for the advertising, which costs $100 per ad. Revenues from the book are split equally between Millie and her publisher. Let T1 be the number of trips that Millie would choose to make in a Nash equilibrium where she chooses the number of trips and the publisher chooses the amount of advertising. Let T2 be the number of trips that Millie should make if trips and advertising are determined so as to maximize total profits net of trip and ad costs. (a) 71 = 1 and 72 = 1. (b) T1 = 1 and 72 = 2. (e) T1= 2 amd T2 = 1. (d) T1=1 and 72 = 1/8. (e) T1= 1/8 and 72 = 1.

32.23 Millie Bush has written a best-seller. Revenues net of production costs are $3007¹/341/3 where T is the number of publicity trips Millie takes and A is the number of ads for the book that appear. Millie has to pay for all of her own publicity trips, which cost $100 each. Her publisher pays for the advertising, which costs $100 per ad. Revenues from the book are split equally between Millie and her publisher. Let T1 be the number of trips that Millie would choose to make in a Nash equilibrium where she chooses the number of trips and the publisher chooses the amount of advertising. Let T2 be the number of trips that Millie should make if trips and advertising are determined so as to maximize total profits net of trip and ad costs. (a) 71 = 1 and 72 = 1. (b) T1 = 1 and 72 = 2. (e) T1= 2 amd T2 = 1. (d) T1=1 and 72 = 1/8. (e) T1= 1/8 and 72 = 1.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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