Required information Below is a profit pay-off matrix for two oligopoly firms: Calvin Inc. and Hobbs Ltd. Calvin's profits are shown in the upper portion of each box and Hobb's are in the lower portion. Low Budget Hobbs Ltd. High Budget Low Budget $600 $900 $600 $300 Calvin Inc. His Bedpet $300 $400 $900 er to the information above to answer this question. Which of the following statements is correct if Calvin and Hobbs reach a secret hement between themselves concerning advertising budgets and this agreement holds because neither cheat?
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- For example, the lower left cell of the matrix shows that if Full Coop advertises and Lucky Bird does not advertise, Full Coop will make a profit of $14 million, and Lucky Bird will make a profit of $3 million. Assume this is a simultaneous game and that Lucky Bird and Full Coop are both profit- maximizing firms. If Lucky Bird chooses to advertise, it will earn a profit of $ advertise. million if Full Coop advertises and a profit of $ million if Full Coop does not If Lucky Bird chooses not to advertise, it will earn a profit of $ not advertise. million if Full Coop advertises and a profit of $ million if Full Coop does S If Full Coop advertises, Lucky Bird makes a higher profit if it chooses If Full Coop doesn't advertise, Lucky Bird makes a higher profit if it chooses Suppose that both firms start off by deciding not to advertise. If the firms act independently, what strategies will they end up choosing? Both firms will choose not to advertise. O Lucky Bird will choose not to…5. To advertise or not to advertise Suppose that Expresso and Beantown are the only two firms that sell coffee. The following payoff matrix shows the profit (in millions of dollars) each company will earn depending on whether or not it advertises: Expresso Advertise Doesn't Advertise Beantown Advertise 10, 10 2, 18 For example, the upper right cell shows that if Expresso advertises and Beantown doesn't advertise, Expresso will make a profit of $18 million, and Beantown will make a profit of $2 million. Assume this is a simultaneous game and that Expresso and Beantown are both profit-maximizing firms. Doesn't Advertise 18, 2 11, 11 If Expresso decides to advertise, it will earn a profit of S advertise. If Expresso decides not to advertise, it will earn a profit of S not advertise. O O million if Beantown advertises and a profit of s If Beantown advertises, Expresso makes a higher profit if it chooses If Beantown doesn't advertise, Expresso makes a higher profit if it cnot to advertise…2. Philip Morris and R.J. Reynolds spend huge sums of money each year to advertise their tobacco products in an attempt to steal customers from each other. Suppose each year Philip Morris and R.J. Reynolds have to decide whether or not they want to spend money on advertising. If neither firm advertises, each will earn a profit of $2 million. If they both advertise, each will earn a profit of $1.5 million. If one firm advertise and the other does not, the firm that advertises will earn a profit of $2.8 million and the other firm earn $1 million.c. Use a payoff matrix to depict this problem.d. What is the dominant strategy for Philip Morris and R.J. Reynolds?e. What is the Nash Equilibrium without an enforceable contract?
- 5. To advertise or not to advertise Suppose that Creamland and Dairy King are the only two firms that sell ice cream. The following payoff matrix shows the profit (in millions of dollars) each company will earn depending on whether or not it advertises: Dairy King Advertise Doesn't Advertise Advertise 8, 8 15, 2 Creamland Doesn't Advertise 2, 15 11, 11 For example, the upper right cell shows that if Creamland advertises and Dairy King doesn't advertise, Creamland will make a profit of $15 million, and Dairy King will make a profit of $2 million. Assume this is a simultaneous game and that Creamland and Dairy King are both profit-maximizing firms. If Creamland decides to advertise, it will earn a profit of $ million if Dairy King advertises and a profit of $ million if Dairy King does not advertise. If Creamland decides not to advertise, it will earn a profit of $ million if Dairy King advertises and a profit of $ million if Dairy King does not advertise. If Dairy King advertises,…13. Study Questions and Problems #13 Suppose that Camel and Marlboro are the only two firms that sell cigarettes. The following payoff matrix shows the profit (in millions of dollars) that each company will earn depending on whether or not it advertises. For example, the upper-right cell shows that if Camel advertises and Marlboro doesn't advertise, Camel will make a profit of $10 million, and Marlboro will make a profit of -$2 million. Assume this is a simultaneous game and that Camel and Marlboro are both profit-maximizing firms. Marlboro Advertise Don't Advertise Advertise 5.5 10, -2 Camel Don't Advertise -2, 10 8. 8 If Camel advertises, its profit is S advertise, its profit is $ million if Marlboro advertises and $ million if Marlboro advertises and S million if Marlboro does not advertise. If Camel does not million if Marlboro does not advertise. Fill in the following table by identifying the firms' action depending on whether they decide to act independently or collude. (Note:…The company Econislife is deciding what output level will provide profit-maximization. According to the graph below, what level of output will maximize profit? 10,000 T 9,000- 8,000- 7,000+ 6,000+ Dollars 5,000+ 4,000+ 3,000+ 2,000- 1,000+ Total cost Total revenue 10 20 30 40 50 60 70 80 90 Quantity 100 Econislife total revenue and total cost Provide your answer below:
- * 00 工 B T ロ|0|0| %24 1. Conditions for monopolistic competition Consider the monopolistically competitive market structure, which has some features of a competitive market and some features of a monopoly. Complete the following table by indicating if each attribute characterizes a competitive market, a monopolistically competitive market, both, or neither. Check all that apply. Attributes Competitive Market Monopolistically Competitive Market Price taker Identical products Price equals average total cost in the long run Product differentiation Grade It Now Save & Continue Continue without saving MacBook Pro AFAT ACIDHE i & 23 2 4 3. 5. R option command10:43 A docs.google.com Your answer Syukri, Iqmal and Amir run the only shop in Wang Ulu. They sell electrical goods such as televisions, washing machines, etc. However, their objectives are different from each other. Syukri wants to make as much profit as he can, Iqmal wants to sell as many goods as he can without losing money, and Amir wants to earn as much revenue as he can. The graph below illustrates their respective profits. (Note: The length of each square on the Y-axis represents RM100, and the length of each square on the X-axis represents 100 units.) What is the quantity for Syukri? Revenue, Cost MC AC Quantity 100 200 3005. To advertise or not to advertise Suppose that two firms, Frankencakes and Thinley's, are the only sellers of crepes in some hypothetical market. The following payoff matrix gives the profit (in millions of dollars) earned by each company depending on whether or not it chooses to advertise: Frankencakes Thinley's Advertise Doesn't Advertise Advertise 9,9 Doesn't Advertise 3,15 For example, the lower left cell of the matrix shows that if Thinley's advertises and Frankencakes does not advertise, Thinley's will make a profit of $15 million, and Frankencakes will make a profit of $3 million. Assume this is a simultaneous game and that Frankencakes and Thinley's are both profit- maximizing firms. advertise If Frankencakes chooses to advertise, it will earn a profit of 5 15,3 11.11 If Frankencakes chooses not to advertise, it will earn a profit of S not advertise. Both firms will choose to advertise O Both firms will choose not to advertise. million if Thinley's advertises and a profit of…
- tory Bookmarks Profiles Quiz: Module 5 Qu x com/courses/111015/quizzes/852942/take To 9 7 C Tab Window Help Course Modules: Ex Topic: Planet Mon x | For the remaining questions consider two gas stations competing as an oligopoly. There are the only two gas stations in a small town. Each week they must simultaneously display their prices choosing between a high price and a low price. The payoff matrix below displays the weekly profits earned by the gas stations if they choose the various prices. Shell Decisions tv High Price Low Price Low Price NIDZA O V High Price S: $5,000 C: $5,500 (a) If Shell knows Chevron will choose the HIGH PRICE, what price should Shell choose? Low Price S: $7,500 C: $1,500 (b) If Shell knows Chevron will choose the LOW PRICE, what price should Shell choose? Low Price Aa Chevron Decisions (c) Does Shell have a dominant strategy? If so, what is it? Their dominant strategy is to Q Search Securify Module 5 Practice. x | Module 5 Lecture X (d) If Chevron knows…Suppose there are only two automobile companies, Ford and Chevrolet. Ford believes that Chevrolet will match any price it sets, but Chevrolet too is interested in maximizing profit. Use the following price and profit data to answer the following questions. Ford's Chevrolet's Ford’s Chevrolet’s Selling Selling Profits Profits Price Price (millions) (millions) $ 4,000 $ 4,000 $ 8 $ 8 4,000 8,000 12 6 4,000 12,000 14 2 8,000 4,000…5. To advertise or not to advertise Suppose that two firms, Lucky Bird and Full Coop, are the only sellers of seitan buffalo wings in some hypothetical market. The following payoff matrix gives the profit (in millions of dollars) earned by each company depending on whether or not it chooses to advertise: Lucky Bird Full Coop Advertise Advertise 9,9 Doesn't Advertise 3, 15 Doesn't Advertise 15,3 11, 11 For example, the lower left cell of the matrix shows that if Full Coop advertises and Lucky Bird does not advertise, Full Coop will make a profit of $15 million, and Lucky Bird will make a profit of $3 million. Assume this is a simultaneous game and that Lucky Bird and Full Coop are both profit- maximizing firms. If Lucky Bird chooses to advertise, it will earn a profit of S advertise. If Lucky Bird chooses not to advertise, it will earn a profit of s not advertise. million if Full Coop advertises and a profit of If Full Coop advertises, Lucky Bird makes a higher profit if it chooses…