Macmillan Learra. Does McLaren have a dominant strategy?If so, what is it?as many points as possible.O Yes. Their dominant strategy is to leave aerodevelopment spending unchanged.O Yes. Their dominant strategy is to increase aerodevelopment spending.O No, they do not have a dominant strategy.b. Does Red Bull have a dominant strategy?If so, what is it?Yes. Their dominant strategy is to increase aerodevelopment spending.Yes. Their dominant strategy is to leave aerodevelopment spending unchanged.O No, they do not have a dominant strategy.RedBullspendingDo notchangespendingearns 354pointsMcLaren earns378 pointsRed Bullearns 153.5pointsRed Bullearns 460pointsMcLaren earns454 pointsRed Bullearns 400points O Macmillan LearningMcLaren and Red Bull are competing for the Formula OneConstructors' Championship and are deciding whether toincrease their spending on their aerodynamic (aero)development. The matrix displays the payoffs to the team thatresult from each possible choice. Note that, due to otherfactors, the payoffs are not symmetrical. Assume that eachteam's goal is to earn as many points as possible.a. Does McLaren have a dominant strategy?If so, what is it?O Yes. Their dominant strategy is to leave aerodevelopment spending unchanged.O Yes. Their dominant strategy is to increase aerodevelopment spending.O No, they do not have a dominant strategy.b. Does Red Bull have a dominant strategy?If so, what is it?O Yes. Their dominant strategy is to increase aerodevelopment spending.Yes. Their dominant strategy is to leave aeroRedBullRaisespendingDo notchangespendingMcLarenIncrease spending Do not changespendingMcLaren earns142 pointsMcLaren earns360 pointsRed Bullearns 354pointsMcLaren earns378 pointsRed Bullearns 153.5pointsRed Bullearns 460pointsMcLaren earns454 pointsRed Bullearns 400points

A dominant strategy of a player is the one that does not change with change in actions of the other…

Macmillar a. Does McLaren have a dominant strategy? If so, what is it? Yes. Their dominant strategy is to leave aero development spending unchanged. Yes. Their dominant strategy is to increase aero development spending. No, they do not have a dominant strategy. b. Does Red Bull have a dominant strategy? If so, what is it? Yes. Their dominant strategy is to increase aero development spending. Yes. Their dominant strategy is to leave aero development spending unchanged. No, they do not have a dominant strategy. Red Bull Do not change spending points McLaren earns 378 points Red Bull earns 153.5 points poi Rec ear: poi

Macmillar a. Does McLaren have a dominant strategy? If so, what is it? Yes. Their dominant strategy is to leave aero development spending unchanged. Yes. Their dominant strategy is to increase aero development spending. No, they do not have a dominant strategy. b. Does Red Bull have a dominant strategy? If so, what is it? Yes. Their dominant strategy is to increase aero development spending. Yes. Their dominant strategy is to leave aero development spending unchanged. No, they do not have a dominant strategy. Red Bull Do not change spending points McLaren earns 378 points Red Bull earns 153.5 points poi Rec ear: poi

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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