What is the final outcome if each firm follows its dominant strategy?
a. Each firm makes a profit of $75 M.
b. Each firm makes a profit of $100 M.
c. Each firm makes a profit of $125 M.
d. Each firm makes a profit of $175 M.
a. Each firm makes a profit of $75 M.
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A likely consequence of deposit insurance, ceteris paribus, is ________
A) an increase in risk-taking by banks B) a bank panic C) a credit boom D) a reduction in the severity of adverse selection
Suppose you manage a baseball stadium. To pay the salary for a star player, you would like to increase the total revenue from ticket sales. Should you increase or decrease the price of a ticket to increase revenue? Explain
Wage and price stickiness
A. creates a surplus or a shortage of real GDP. B. give rise to a vertical long-run aggregate supply curve. C. give rise to a vertical short-run aggregate supply curve. D. prevents the economy from producing its potential level of real GDP.
People acting in their own self interest is the basis of the:
A. principle of supply and demand. B. principle of voluntary exchange. C. real-nominal principle. D. principle of scarcity.