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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 Creamland Advertise 6, 6 19, 4 Doesn’t Advertise 4, 19 10, 10 For example, the upper right cell shows that if Creamland advertises and Dairy King doesn't advertise, Creamland will make a profit of $19 million, and Dairy King will make a profit of $4 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, Creamland makes a higher profit if it chooses . If Dairy King doesn't advertise, Creamland makes a higher profit if it chooses . Suppose that both firms start off not advertising. If the firms act independently, what strategies will they end up choosing? Creamland will choose to advertise and Dairy King will choose not to advertise. Both firms will choose to advertise. Both firms will choose not to advertise. Creamland will choose not to advertise and Dairy King will choose to advertise. Again, suppose that both firms start off not advertising. If the firms decide to collude, what strategies will they end up choosing? Creamland will choose to advertise and Dairy King will choose not to advertise. Both firms will choose not to advertise. Both firms will choose to advertise. Creamland will choose not to advertise and Dairy King will choose to advertise.
Why does inflation affect increase in Social Security and or profits. Is this effect a cost of inflation, as article suggests. Why or why not.
Consider the recipient's perspective in the global impact of development versus relief aid. Suppose a fixed amount of aid b is given to each worker in a developing country and that donors commit to continue these aid flows indefinitely. Assume aid fl..
In the specific factors model predict who seeks protection against trade and who does not. Explain your answer. How does your answer change in the Hecksher-Ohlin model? Explain
Under what circumstance would you be no worse off if the company paid you cash instead of providing a car.
The new Star Wars movie "Make Room for Yoda" is opening at the local cineplex on Friday. The cineplex announces that no passes or discounts will be honored for "Make Room for Yoda". Cineplex management believes that demand for the new movie will
Suppose that Martha’s income is $40,000 per year. She can spend it on health care visits, which cost $80 per visit, or on groceries (standing for all other goods) which cost $100 per bag of groceries. Draw Martha’s budget constraint. Using in differe..
What is comparative trade and absolute; and what are their advantages? For securities trading, what is revenue and protective? What is the distinction between balance of trade and balance of payments? What is the exchange rate? and what is the impact..
You have 100$ spend on food, housing, and clothing. Explain how their marginal utilities should be related to their respective prices to maximize utility. Generalize the result for any number of commodities.
Now, imagine you are the CEO of a U.S.-based organization. How will the U.S. government’s decision of replacing GDP with GNH affect your organizational strategies? How will your focus on employee engagement change?
q. transfers to the rest of the world 20loans to the rest of the world 60loans from the rest of the world?increases in
Graph the supply and demand curves in this market. Be sure to put the quantity (Q) on the horizontal axis and the price (P) on the vertical axis. You may use quantities two (Q = 2) through eighteen (Q = 18) by units of one (1) for your graph. What is..
Considering that poverty rates for some groups have gone down over the last 40 years, and have remained stable for everybody else, yet the overall poverty rate is still about 15%. Discuss whether you think we can ever get the poverty rate below 10%? ..
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