If Jet Cruises chooses to Ad and Easy Sail then chooses to No Ad, Jet Cruises earns ________ million in net profit and Easy Sail earns ________ million.
Jet Cruises wants to prevent Easy Sail from entering the sailboat market. The above game tree illustrates the different strategies and corresponding payoffs for the two firms. Both Jet Cruises and Easy Sail have the same strategies of advertising (Ad) or not advertising (No Ad). The payoffs represent net profit in millions.
A) $4; $3 B) $2; $4 C) $5; $2 D) $10; $2
C) $5; $2
You might also like to view...
Which of the following is true of adverse selection? a. It can result when one of the parties to a transaction has little information about the quality of the goods involved. b. It can cause the quality of goods traded to fall, if quality detection costs are high
c. It can be a difficult problem to overcome, because it is not individually rational for the transactor with the superior information to provide a truthful and complete disclosure. d. All of the above are true.
From 2009 to 2012, the federal government's budget deficit was about
a. 5 percent of GDP, and this led to the highest debt-GDP ratio in U.S history. b. 10 percent of GDP, and this led to the highest debt-GDP ratio in U.S history. c. 5 percent of GDP, and this led to the highest debt-GDP ratio since World War II. d. 9 percent of GDP, and this led to the highest debt-GDP ratio since World War II.
If a hurricane were to wipe out the majority of the eastern seaboard in the United States, it would likely cause a:
A. short-run supply shock. B. long-run supply shock. C. long-run demand shock. D. short-run demand shock.
The classicals believed that when savings exceeds investment.
A. demand is reduced and the economy will go into a recession. B. the interest rate will decline and equate savings and investment. C. an increase in supply will encourage higher investment spending. D. if savings is greater than investment unemployment would reduce savings.