Lori and Maya are competitors in a local market. Each is trying to decide if it is better to advertise on TV, on radio, or not at all. If they both advertise on TV, each will earn a profit of $10,000 . If they both advertise on radio, each will earn a profit of $14,000 . If neither advertises at all, each will earn a profit of $20,000 . If one advertises on TV and other advertises on radio, then
the one advertising on TV will earn $16,000 and the other will earn $6,000 . If one advertises on TV and the other does not advertise, then the one advertising on TV will earn $30,000 and the other will earn $4,000 . If one advertises on radio and the other does not advertise, then the one advertising on radio will earn $24,000 and the other will earn $8,000 . If both follow their dominant strategy, then Lori will
a. advertise on TV and earn $10,000.
b. advertise on radio and earn $14,000.
c. not advertise at all and earn $20,000.
d. None of the above is correct. Lori and Maya do not have dominant strategies.
a
You might also like to view...
Which of the goals pursued by policymakers in an open economy is desirable because can help reduce the volatility of economic activity?
A) exchange-rate stability B) monetary policy independence C) free capital flows D) appreciation of the domestic currency
If economic profit is zero, then a normal profit is earned
a. True b. False Indicate whether the statement is true or false
A graph is a
a. lengthy, inefficient, and inconvenient way to illustrate information b. diagram illustrating a relationship between variables c. method of proving causation d. tool for incorporating all major and minor variables in one illustration e. clear way to see how the fallacy of composition works
A given short-run Phillips curve shows that an increase in the inflation rate will be accompanied by a lower unemployment rate in the short run
a. True b. False Indicate whether the statement is true or false