Firm A and firm B are the only producers of Mac and Cheese i…
Firm A and firm B are the only producers of Mac and Cheese instant packages in the market. They know that if they cooperate and produce less Mac and Cheese packages, they could raise the price of the package. If they do not cooperate and work independently, they will each earn $100,000. If they decide to cooperate and both lower their output, they can each earn $150,000. If one firm lowers the output but the other does not, the firm that lowered the output will get $0 and the firm that did not will get $200,000, as it will capture the entire market. The table below shows the choices and correspondent outcomes: Prisoner’s Dilemma for Oligopoly Firm A Not Cooperate (NC) Cooperate (C) Firm B NC ($100k, $100k) ($200k, $0) C ($0, $200k) ($150k, $150k) If B knows for sure that A will cooperate, B should [option1], if A knows for sure that B will cooperate, A should [option2], hence based on the previous answers, the dominant strategy is [option3].
Read DetailsAna currently works for a law firm and she makes an annual s…
Ana currently works for a law firm and she makes an annual salary of $125,000. She wants to open her own legal practice and expects to earn $200,000 per year. In order to do so, she’ll need to hire a clerk who will cost $35,000/year in salary. She also needs to rent an office, which will cost $50,000/ year. Based on this information, answer the following: Calculate Ana’s accounting profit (show your work!). Calculate Ana’s economic profit or loss (show your worl!)
Read DetailsWhen there’s no intervention, the equilibrium quantity is Q1…
When there’s no intervention, the equilibrium quantity is Q1 and the equilibrium price is PE. Suppose the government decides to impose a price ceiling in this market, as it thinks that PE is too high. With the price ceiling, price goes down to Pc, and because of that quantity drops to Q2. Price Ceiling text only Based with the figure above, match the surplus with the correct areas: Words: 2 Characters: 19
Read DetailsSuppose a consumer has a choice between onions and apples. I…
Suppose a consumer has a choice between onions and apples. If Ponion = $2 and Papple = $3, and the consumer budget is $17, answer the following: Total and marginal utility for onions and apples Units MUonion MU/Ponion MUapple MU/Papple 1 10 5 2 8 4 3 2 3 4 2 2 5 1 2 Complete the table above finding the marginal utility per dollar for both onion and apple. Make sure to show your work for at least one cell; Find the utility maximizing choice for this consumer. Remember to show your work and justify your answer. You won’t receive credit if you only provide the final answer!
Read DetailsSuppose your Chaffey college tuition per semester is $4,000…
Suppose your Chaffey college tuition per semester is $4,000 and your extra expenses with the college during the year (books, other materials, gas, meals, etc.) sum $3,000. If you were not attending college, you could work at firm X and get an annual salary of $ 5,000. What is your opportunity cost of attending college in one year? In your calculations assume that you are taking 2 semesters in a year. Show your work! You won’t get credit if you provide only the final answer!
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