1. The payoff table below demonstrates pricing decision game betwe...

  1. Home
  2. Homework Library
  3. Business
  4. Economics
  5. 1. The payoff table below demonstrates pricing decision game betwe...

QuestionQuestion

Transcribed TextTranscribed Text

1. The payoff table below demonstrates pricing decision game between two pizza providers in town. Each pizza provider is faced with decision to price their product in a high, medium, or low price category. (3 pts) Dominoes Low Medium High Low $500,$500 $425, $750 $575,$700 Pizza Hut Medium $600,$400 $550, $600 $580, $580 $450,$375 $400,$550 $550, $775 High a. Does Pizza Hut have dominated strategy in the original payoff table? If so, what it and why is dominated? If not. why not? b. Does Dominoes have adominated strategy in the original payofl table? If so, what it and why isi dominated? If not, why not? c. What is the resulting dominant strategy equilibrium of this pricing decision problem? Please explain the decision making process of each firm. 2. What role do property rights play in creating common property resources? Why are common property resources subject to market failure due to non-excludability?(2 pts 3. Suppose there are two movie rentalstores in town: Captain Video and Movie Mania. These movie rental firms face choice between two advertising strategies: television (T) and radio (R). Captain Video will be the first firm to make decision, and their decision will be based on the anticipated action of Movie Mania. A game tree is provided below: Captam Vidoo T R Movie Mar. Move Mania T 3 R $350, Soco $650,5750 $200,$200 Find the Nash equilibrium using the backward induction method. Please explain the decision making process of each firm. (3 pts) 4. The figure below shows the marginal damage (MD) and the marginal abatement cost (MAC) curve facing an industry that discharges pollutant into the environment. (4 pts) 1 8ce MC-MP c:o 325 MAC Tota de Ifenvironmental regulations do not restrict pollution by this industry how many tons per month would be discharged? What is the total damage caused by pollution at this level of emissions? What are total abatement costs per month? What is the total social cost of pollution in this industry in the absence of government restrictions on pollution? b. If environmental regulators banned all pollution, what is the resulting total abatement cost for the industry per month? What the total social cost for zero pollution in the industry per month? c. Using the figure above, explain why zero pollution in the industry not optimal from society' point of view? d. What is the socially optimal level of emissions for the industry per month? What would be the resulting total abatement cost per month? Total damage per month? Total social cost per month? If environmental authorities wished to control pollution in the industry by imposing an emission tax on pollution, what would be the optimal tax rate per ton of emissions? At this rate, how many tons of pollutants would the industry emit per month? What the total tax bill to be collected per month? What would be the resulting total abatement cost per month? 5. Explain the trade-off managers must make between considering private versus social costs? How might this trade-ofl differ among industries? (3 pts)

Solution PreviewSolution Preview

These solutions may offer step-by-step problem-solving explanations or good writing examples that include modern styles of formatting and construction of bibliographies out of text citations and references. Students may use these solutions for personal skill-building and practice. Unethical use is strictly forbidden.

    By purchasing this solution you'll be able to access the following files:
    Solution.docx.

    $30.00
    for this solution

    or FREE if you
    register a new account!

    PayPal, G Pay, ApplePay, Amazon Pay, and all major credit cards accepted.

    Find A Tutor

    View available Economics Tutors

    Get College Homework Help.

    Are you sure you don't want to upload any files?

    Fast tutor response requires as much info as possible.

    Decision:
    Upload a file
    Continue without uploading

    SUBMIT YOUR HOMEWORK
    We couldn't find that subject.
    Please select the best match from the list below.

    We'll send you an email right away. If it's not in your inbox, check your spam folder.

    • 1
    • 2
    • 3
    Live Chats