LZ and AP are the only two airport shuttle and limousine rental service companies in the mid-sized town of Erie, PA. Each firm must decide on whether to offer its customers a mid-week discount for airport transportation. The table shows the payoff matrix for profits earned by each company based on either offering or not offering the discount. What is the Nash equilibrium in this game?

Table 17-2Imagine a small town in which only two residents, Abby and Brad, own wells that produce safe drinking water. Each week Abby and Brad work together to decide how many gallons of water to pump. They bring water to town and sell it at whatever price the market will bear. To keep things simple, suppose that Abby and Brad can pump as much water as they want without cost so that the marginal cost is zero. The weekly town demand schedule and total revenue schedule for water is shown in the table below: Quantity(in gallons) Price Total Revenue(and Total Profit) 0 $12 $0 1 $11 $11 2 $10 $20 3 $9 $27 4 $8 $32 5 $7 $35 6 $6 $36 7 $5 $35 8 $4 $32 9 $3 $27 10 $2 $20 11 $1 $11 12 $0 $0 Refer to Table 17-2. Suppose that Abby and Brad work together to operate as a profit-maximizing monopolist. What price will they charge for water?

Suppose in Philadelphia the quantity of economists demanded is less than the quantity supplied by 2,000 economists. As a result,

The payoff matrix shown above assumes that Pretty Petunia’s (PP) and Fabulous Flowers (FF) must decide whether to offer same-day delivery for their products. The matrix shows how much profit each firm will earn if it does or does not offer same-day delivery. The amount of profit for one firm depends on whether the other firm offers same-day delivery. Which of the following statements is true?

When a certain monopoly sets its price at $8 it sells 64 units. When the monopoly sets its price at $10 it sells 60 units. The marginal revenue for the firm over this range is

The total output of soap in Sally’s soap shop increases from 25 per hour to 45 per hour as she hires the second worker. The price of each bar of soap is $3. The

Figure 18-9   Refer to Figure 18-9. If the price of apples decreases, the

Figure 18-6 Refer to Figure 18-6. The graph above illustrates the market for bakers who make homemade breads and breakfast pastries. If the wages paid to wedding cake bakers increase, what happens in the market for bread bakers?

A perfectly competitive firm is producing 50 units of output and selling at the market price of $23. The firm’s average total cost is $20. What is the firm’s economic profit?    

The figure above shows cost and demand curves for a monopolistically competitive producer of iced tea. At the profit-maximizing output level, the firm in the figure above will