If you advertise and your rival advertises, you each will earn $4 million in profits. If neither of you advertises, you will each earn $10 million in profits. However, if one of you advertises and the other does not, the firm that advertises will earn $1 million and the non-advertising firm will earn $5 million. Suppose this game is repeated for a finite number of times, but the players do not know the exact date at which the game will end. The players can earn profits of $10 each period as a Nash equilibrium to a repeated play of the game if the probability the game terminates at the end of any period is:
A. between 0 and 1.
B. close to 1.
C. close to 0.
D. All of the statements associated with this question are correct.
Answer: D
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Suppose that a new study is released stating that consumption of orange juice (a substitute for apple juice) reduces the risk of cancer, and a major freeze destroys half of the country's apple cro
A) The price of apple juice might rise or fall and the quantity of apple juice falls. B) The quantity of apple juice might rise or fall, and the price of apple juice rises. C) The price of apple juice falls and the quantity of apple juice falls. D) The price of apple juice might rise or fall and the quantity of apple juice rises.
What is the main difference between the demand curves for the perfect competitor and the monopolist?
What will be an ideal response?
A firm producing cans buys three tons of aluminum per day at $200 per ton. If it buys four tons per day, it receives a quantity discount on all units and pays only $175 per ton. The marginal cost of the fourth ton per day is
a. $100. b. $175. c. $700. d. $225.
Which of the following individuals received a Nobel Prize in economics for his work in behavioral economics?
A. Daniel Kahneman. B. Richard Thaler. C. John Wannamaker. D. Richard Easterlin.