Refer to the payoff matrix below. If Cruise the World uses a mixed strategy, what probability for offering Specials should the firm use to equate Cruise R Us' expected profits from offering a Special or not offering a special (No Special)?
Cruise R Us and Cruise the World compete in the cruise line industry. Each firm needs to determine if they are going to offer special cruise packages with special rates or not offer the specials. The above payoff matrix shows the firms' net economic profit for each set of strategies.
A) 0.75 B) 0.375 C) 0.33 D) 0.625
D) 0.625
You might also like to view...
Which of the following is a normative economics statement?
a. An increase in the minimum wage will reduce teenage employment. b. Increasing the minimum wage will result in more votes for progressive candidates. c. Raising the minimum wage would greatly increase labor costs in certain industries. d. Raising the minimum wage is a poor idea because living wage laws are better.
Examples of incentive pay include
a. allowing employees a certain number of personal days b. providing onsite parking for employees c. bonuses for meeting deadlines d. offering a certain number of sick days
Increased government spending is an example of:
A. expansionary fiscal policy. B. contractionary fiscal policy. C. expansionary monetary policy. D. contractionary monetary policy.
Which of the following is a possible reason for diversification?
A. To promote the supply of complementary products B. To internalize negative externalities C. To increase social benefits D. To promote the supply of substitute products