ECO 550 Week 7 Chapter 13 and Chapter 14 Problems
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Chapter 13: Problems 2, 13, and 15
2. Consider the following payoff matrix:
a. Does Player A have a dominant strategy? Explain why or why not.
b. Does Player B have a dominant strategy? Explain why or why not.
13. Analyze the following sequential game and advise Kodak about whether they should introduce the new product, Picture CD.
15.A math graduate student explains to her friend how to approach a group of smartattractive guys who have brought along famous actor Russell Crowe. What shouldher friend do? Ignore Russell Crowe or fixate on Russell Crowe? Explain the equilibrium reasoning underlying your answer. (Note: Best payoff—date with R.C., Better—date with other guys, Worse—no date tonight, Worst—nodate ever with any of these guys.)
Chapter 14: Problems 3(b, c, d), 5(a, b, c), and 8(a, b, c)
3. American Export-Import Shipping Company operates a general cargo carrier service between New York and several Western European ports. It hauls two majorcategories of freight: manufactured items and semi manufactured raw materials.
b. . What are the profit-maximizing levels of price and output for the twofreight categories?
c. At these levels of output, calculate the marginal revenue in each market.
5. Phillips Industries manufactures a certain product that can be sold directly to retail outlets or to the Superior Company for further processing and eventual sale asa completely different product. The demand function for each of these markets is
Retail Outlets: P1 = 60 − 2 Q1
Superior Company: P2 = 40 − Q2
whereP1 and P2 are the prices charged and Q1 and Q2 are the quantities sold inthe respective markets.
Phillips’ total cost function for the manufacture of thisproduct + 8(Q1 + Q2)5.
a. Determine Phillips’ total profit function.
b. What are the...