Table 17-19Consider a small town that has two grocery stores from which residents can choose to buy a loaf of bread. The store owners each must make a decision to set a high bread price or a low bread price. The payoff table, showing profit per week, is provided below. The profit in each cell is shown as (Store 1, Store 2)
Refer to Table 17-19. If grocery store 2 sets a high price, what price should grocery store 1 set? And what will grocery store 1's payoff equal?
Nadia: Don't Clean
Maddie: Don't Clean
Refer to Table 17-20. What is the Nash Equilibrium in this dorm room cleaning game?
Refer to Figure 21-5. In graph (b), what is the price of good X relative to the price of good Y (i.e., Px/Py)?
Figure 16-2. The figure is drawn for a monopolistically competitive firm.
Refer to Figure 16-2. Suppose that average total cost is $36 when Q=24. What is the profit-maximizing price and resulting profit?
Refer to Figure 16-5. Which of the graphs depicts a short-run equilibrium that will encourage the entry of other firms into a monopolistically competitive industry?
Refer to Table 14-1. The price and quantity relationship in the table is most likely a demand curve faced by a firm in a
not clean, and Maddie’s payoff will be 10
Refer to Table 17-20. If Nadia chooses to not clean, then Maddie will
Scenario 17-4.
Consider two cigarette companies, PM Inc. and Brown Inc. If neither company advertises, the two companies split the market and earn $50 million each. If they both advertise, they again split the market, but profits are lower by $10 million since each company must bear the cost of advertising. Yet if one company advertises while the other does not, the one that advertises attracts customers from the other. In this case, the company that advertises earns $60 million while the company that does not advertise earns only $30 million.
Refer to Scenario 17-4. PM Inc.'s dominant strategy is to
Refer to Table 15-15. The monopolist has total fixed costs of $40 and a constant marginal cost of $5. At the profit-maximizing level of output, the monopolist's profit is
Refer to Table 15-19. If a monopolist faces a constant marginal cost of $1, how much output should the firm produce in order to equate marginal revenue with marginal cost?
The information below applies to a competitive firm that sells its output for $40 per unit.
• When the firm produces and sells 150 units of output, its average total cost is $24.50.
• When the firm produces and sells 151 units of output, its average total cost is $24.55.
Refer to Scenario 14-4. When the firm increases its output from 150 units to 151 units, its profit
a. provide consumers with information about quality when quality cannot easily be judged in advance of purchase.
b. give firms a financial incentive to maintain the high quality associated with their brand name.
c. convince consumers to spend more for products nearly identical to generic versions.
d. Both a and b are correct.
Answer: d. Both a and b are correct.
Refer to Figure 21-7. Suppose a consumer has $200 in income, the price of a book is $5, and the price of a DVD is $10. What is the value of A?
Refer to Table 17-29. What is the outcome of this game?
a. P > ATC
b. P = ATC
c. P < ATC
d. Any of the above could be correct.
Answer: d. Any of the above could be correct.
a. positive economic profits.
b. economic losses.
c. zero economic profits.
d. All of the above are possible
Answer: All of the above are possible
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