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Questions;1.;Answers;Explanation (Only if;required by the question);***;2.;3.;4.;5.;6.;7.;8.;9a.;9b.;9c.;9.d;10.;11.;***;***. Explanation needed. Please do not clutter the answer box. Thanks.;Questions;1.Consider two firms, A and B, that produce super computers. Each can produce the next generation super;computer for math (M) or for chip research (C). However, only one can successfully produce for both markets;simultaneously. Also, if one produces one type, the other might not be able to successfully produce the same type;because of the limited market. The following payoff matrix illustrates the problem.;Firm B;Firm A;M;C;M;2, 1;1, 1;C;2, 2;3, 2;Find the Nash equilibrium (include the payoff in your answer), and explain why it is a Nash;equilibrium.;Scenario BB;ABC Inc.;Offer Rebate;Offer Rebate;20, 10;30, 0;No Rebate;XYZ Corp;No Rebate;12, 16;20, 4;2.Which of the following is true about the game in Scenario BB?;a.;b.;c.;d.;e.;ABC's dominant strategy is to offer a rebate.;ABC's dominant strategy is not offer a rebate.;XYZ's dominant strategy is to offer a rebate.;XYZ's dominant strategy is not offer a rebate.;Both ABC and XYZ have offer a rebate as a dominant strategy.;Scenario A Consider the following game: Payoffs are in millions of dollars.;ABC Corporation;Buy Turbo Tech;Buy Zamboni Tech;Camden Inc.;Put Poison Pill;Dump Cash Assets;In Turbo Tech;of Zamboni Tech;-\$100, -\$1;\$2, -\$0.5;\$1, -\$1;-\$0.5, -\$0.5;3.In the game in Scenario A;a.;b.;c.;d.;e.;Poison Pill" is a dominant strategy for Camden Inc..;Dump" is a dominant strategy for Camden Inc.;TurboTech" is a dominant strategy for ABC Co.;ZamboniTech" is a dominant strategy for ABC Co.;No firm has a dominant strategy.;4.In the game in Scenario A, what is the Nash equilibrium?;a.;b.;c.;d.;e.;The strategy pair associated with -\$100, -\$1.;The strategy pair associated with \$2, -\$.5.;The strategy pair associated with \$1, -\$1.;The strategy pair associated with -\$.5, -\$.5.;There is no Nash equilibrium in pure strategies.;Scenario CC Consider the following game;It costs each firm Brokely \$3,000 per period to use filters that avoid polluting the lake. However;each firm must use the lake's water in production, so it is also costly to have a polluted lake. The;cost to each firm of dealing with water from a polluted lake is \$2000 times the number of;polluting firms.;Burgess, Inc.;Pollute;Dont Pollute;Avale, Corp.;Pollute;Dont Pollute;-\$4,000, -\$4,000;-\$2,000, -\$5,000;-\$5,000, -\$2,000;-\$3,000, -\$3,000;5.What is true about dominant strategies in the game in Scenario CC?;a.;b.;c.;d.;e.;Pollute" is a dominant strategy for both firms.;Pollute" is a dominant strategy for Burgess only.;Don't Pollute" is a dominant strategy for both firms.;Don't Pollute" is a dominant strategy for Burgess only.;There are no dominant strategies.;6.In a Nash equilibrium;a.;b.;c.;d.;e.;each player has a dominant strategy.;no players have a dominant strategy.;at least one player has a dominant strategy.;players may or may not have dominant strategies.;the player with the dominant strategy will win.;7.Nash equilibria are stable because;a.;b.;c.;d.;e.;they involve dominant strategies.;they involve constant-sum games.;they occur in noncooperative games.;once the strategies are chosen, no players have an incentive to negotiate jointly to change;them.;once the strategies are chosen, no player has an incentive to deviate unilaterally from them.;Scenario DD Consider the game below;Player B;Player A;Strategy A1;Strategy A2;Strategy;B1;600, 600;1000, 100;Strategy;B2;100, 1000;200, 200;8..What kind of game is shown in Scenario DD?;a.;b.;c.;d.;e.;Dominant Paradox.;Strategic Match.;Prisoners Dilemma.;Cournot's Duopoly Game.;It is not possible to tell what kind of game it is because the strategies have not been;identified.;GRAPH for Question 9;9a. What is the firms Total Cost the profit maximizing level of output?;9b. What is the Profit per unit at the profit maximizing level of output?;9c. What is the firms Total Profits at the profit maximizing level of output?;9d. If the above monopolist were to behave like a perfect competitive firm operating in the long;run, determine its price and output.;10..Suppose that the market demand for mountain spring water is given as follows;P = 1200 Q. Mountain spring water can be produced at no cost. What is the profit maximizing;level of output and price of a monopolist? Explain by showing the working;11.When one automaker begins offering low cost financing or rebates, others tend to do the;same. What two oligopoly models might offer an explanation for this behavior?

Paper#29430 | Written in 18-Jul-2015

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