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Airlines often find themselves in price wars. Consider the following game: Delta and United are the only two airlines flying the route from Houston to Omaha. Each firm has two strategies: charge a high price or charge a low price.
a. What (if any) is the dominant strategy for each firm?
b. Is this game a prisoner's dilemma?
c. How could repeated playing of the game change the strategy each firm uses?
Electrical power costs at a mine are estimated to be $850,000 in each of the next 12 years. Find out the present value of this expenditure at an interest rate of 11%.
Illustrate using a fully labeled supply and demand graph what such an artificial price looks like - Explain what the results of such a move are for the graham cracker market - Explain in economic terms why private firms would not run a lighthouse.
Exactly 3 years ago, Sports Injury Analysis, Inc. paid $495,000 for a used 1998 GE 1.5T MRI for analyzing spinal and joint injuries caused by sports-related accidents. Depreciation is charged using the government-approved rates for tax pur- poses..
Suppose that the goverment of the city of Udellum, wich has a Baa credit ratng issues a bond with the same time to maturity in a market that is just as liquid as the market for corporate bonds. Suppose that investors have a federal tax rate of 30 ..
Gorton is HIV positive. He is also has severe allergies. The medication he takes to control the debilitating effects of his allergies causes his nasal membranes to dry out, resulting in frequent nosebleeds. Even though his allergy medications cont..
4) Suppose the federal government were to levy a national property tax on all housing in the United States. Assume that all households are renters, are perfectly mobile, and have homogenous tastes.a) Assuming the money raised by the property tax is w..
1. cold case inc. produces beverage containers used by fast food franchises. this is a perfectly competitive market.
Discuss any recent purchases you have made and for which you feel that a similar rational seemed to be at work
Assume monopolizing a service or product of your choice. Discuss how you would go about setting prices for your product or service.
the gpi bookstore orders sweaters with the gpi logo on them and sells them for 40 a piece. during a typical month 80
A consumer receives income y in the current period, income y in the future period, and pays taxes t and t' in the current and future periods, respectively. The consumer can lend at real interest rate r. the consumer is given two options. First, he or..
In an effort to move the economy out of a recession, the federal government would engage in expansionary economic policies. Describe the actions the government would take in conducting expansionary fiscal policy and expansionary monetary policy.
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