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Shtirlitz [24]
2 years ago
11

Consider a remote town in which two restaurants, All-You-Can-Eat Cafe? and GoodGrub Diner, operate in a duopoly. Both restaurant

s disregard health and safety regulations, but they continue to have customers because they are the only restaurants within 80 miles of town. Both restaurants know that if they clean up, they will attract more customers, but this also means that they will have to pay workers to do the cleaning.
If neither restaurant cleans, each will earn $14,000; alternatively, if they both hire workers to clean, each will earn only $11,000. However, if one cleans and the other doesn't, more customers will choose the cleaner restaurant; the cleaner restaurant will make $18,000, and the other restaurant will make only $6,000.

Complete the following payoff matrix using the previous information. (Note: All-You-Can-Eat Cafe? and GoodGrub Diner are both profit-maximizing firms.)
Business
1 answer:
stich3 [128]2 years ago
8 0

Answer:

Both restaurant will clean up

Explanation:                                                        

In the table below the first number in the parentheses belongs to All-You-Can-Eat Café? and the second number belongs to GoodGrub Diner . And the titles (Clean Up and Not Clean) represents their options separately.

                                                                            GoodGrub Diner

                                                     Clean Up            Not Clean

All-You-Can-Eat Café? Clean Up (11 000, 11 000) (18 000, 6 000)

                                Not Clean (6 000, 18 000) (14 000, 14 000)

If All-You-Can-Eat Café? cleans up, GoodGrub Diner will earn 11 000 dollars by cleaning up verses 6 000 dollars by not cleaning. And if All-You-Can-Eat Café? doesn’t clean, GoodGrub Diner will earn 18 000 dollars by cleaning up verses 14 000 dollars by not cleaning. Similarly All-You-Can-Eat Café? will be better off by cleaning up both in the case where GoodGrub Diner cleans up and in the case where GoodGrub Diner doesn’t clean, comparing with the cases All-You-Can-Eat Café? doesn’t clean.

Each restaurant adopts the strategy that is best for itself regardless of which strategy the other restaurant chooses. This is called the Nash equilibrium.

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Answer:

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c. In the formula bar type =365 days; +2 : E6

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Your grandfather wants to establish a scholarship in his father’s name at a local university and has stipulated that you will ad
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Answer:

the answer for the first question is $166667.

the answer for the second question is $210526

the answer for the third question is An inverse.

Explanation:

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the interest rate charged is 6.00% per annum therefore this is a perpetuity present value problem where there is streams of income forever therefore we use the formula :

Pv of perpetuity= Cf/r

where Cr is the cash flows payed by the single investment forever in this case $10000 then r is the interest rate of the investment amount which is 6% in this case.

Pv of Perpetuity= $10000/6%

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in the second problem if now the interest rate is changed from 6% to 4.75% then the amount to be invested would be :

Pv of perpetuity = $10000/4.75%

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the relationship is indirect cause as the interest rate decreases the present value of the perpetuity that must be invested increases.

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Answer:

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In order for the equilibrium quantity and the socially optimal quantity to be equal, the government subsidy should have been equal to the positive externality created by the flu shots ($8).  Since the government subsidy is larger, $11, then the equilibrium quantity will be higher (more flu shots supplied because of high subsidy).

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Answer:

The amount paid should be $1,600

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The terms of 2/10, n/30 means 2% discount for the payment within 10 days and the full amount to be paid within 30 days.

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