If the Los Angeles Lakers had a 42-30 record in the shortened 2020-21 NBA season and then go 50-32 in the 2021-22 season, we would expect the intercept of the demand curve for Lakers tickets to lie A/ up the y-axis in P/Q space in 2021-22 than it did in 2020-21. This means the Lakers could sell A tickets at any price they set in 2021-22. However, the Lakers might not actually sell more tickets to home games even though their demand is higher because they are A by the size of the Staples Center.

If the Los Angeles Lakers had a 42-30 record in the shortened 2020-21 NBA season and then go 50-32 in the 2021-22 season, we would expect the intercept of the demand curve for Lakers tickets to lie A/ up the y-axis in P/Q space in 2021-22 than it did in 2020-21. This means the Lakers could sell A tickets at any price they set in 2021-22. However, the Lakers might not actually sell more tickets to home games even though their demand is higher because they are A by the size of the Staples Center.

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter22: Frontiers Of Microeconomics

Section: Chapter Questions

Problem 6PA

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Exercise 6.1Suppose that two airlines decide to collude. Analyse the game between these two companies. Suppose that each of them can charge for tickets a high price or a low price. If one of them charges 100 euros, it gets few profits if the other also charges 100 euros and high profits if the other charges 200 euros. On the other hand, if the company charges 200 euros, it obtains very little profit if the other charges 100 euros and an average profit if the other also charges 200 euros. a) Represent the matrix of results of this game. b) What is the Nash equilibrium in this game? Explain your answer. c) Is there an outcome that would be better than the Nash equilibrium for the two airlines? How could it be achieved? Who would lose out if it were reached?
2. A small college is trying to predict enrolment for the next academic year. Thevice president for business states that enrolment has tended to follow apattern described by E = 18,000 – 0.5P, where E denotes total enrolment andP is yearly tuition.a) If the school sets tuition at €20,000, how many students can it expect to enrol?b) If the school wants to maximize total tuition revenue, what tuition should itcharge?c) As the vice president for business, what tuition would you recommend? Explainbriefly.d) Due to a strong post-COVID-19 recovery, the income conditions in the regionimprove substantially. Explain in one sentence how this could affect the college’senrolment pattern and the enrolment level maximizing its tuition revenue.
N=2 video broadcasting websites, You and Twi, must decide the number of minutes of ads to be displayed for every video that the user elects to watch. Let tY be the number of ad-minutes per video set by You, and tT the number of ad-minutes per video set by Twi. Streaming one video costs You cY=0.02, while it costs Twi cT=0.03. There are 100 million potential users, and each watches videos according to the following demand curves: qY((tY,tT) =10-2tY+tT=10-2tT+tY a- What is the cross-price elasticity between You and Twi? b- Suppose, for now, that You and Twi enter an (illegal) agreement by which they set tY=tT=t Derive the total number of users in the market as a function of t. Derive the profits for each website as a function of t. c- Now let the two platforms compete by each setting their number of ad-minutes: i. What is the best reply of You? What is the best reply of Twi? ii. Find the Nash Equilibrium of the game. iii. How many total users choose You and how many total users choose…
This is the answer.. plz write in hand written Here, the given decision tree shows that player 1 moves either to enter or not to enter, while player 2 has two options to choose that are concede and price war. When analyzing the given information, it can be seen that player 1 will surely enter the market as it will give him higher payoff than the payoff when he does not enter as does not enter gives him $1 billion, while entry will give him either $2 billion or $1.5 billion. Therefore, player 1 will enter. After the entry of player 1, player 2 has an incentive to choose to concede as it will give him the payoff of$1.5 billion, while price war will give him $1 billion. Therefore, the outcome of this game would be: (Enter, Concede)
2.19. Standard setting. Suppose Apple and Samsung are in the process of negotiating a common standard for a new 3D camera tech- nology they plan to introduce in the next generation of smartphones. Apple has a preference for standard A, whereas Samsung has a pref- erence for standard S. However, both recognize that multiple stan- dards are a worse outcome for all. Specifically, Apple gets 240 if it selects A and Samsung does so too, but only 20 if Samsung does not adopt A. If Apple adopts standard S and Samsung does so too, then Apple gets a payoff of 190. If, however, Samsung chooses A then Ap- ple gets zero. For Samsung, the situation looks similar: If Samsung chooses standard S and Apple does the same then Samsung gets 210, but if Apple chooses A the Samsung's payoff is only 30. If Samsung opts for standard A and Apple does so too then Samsung gets a pay- off of 110, whereas if Apple chooses standard S then Samsung gets a payoff of zero. (a) Suppose that both Apple and Samsung…
Your professor has decided that, from now on, students who receive less than a 60 percent grade onany exam will be eligible to go to a review session. Ifthey attend the session, they will receive an extra 10percent on their grade. You see a problem with thispolicy, and instead propose to your professor thatpeople who go to the review session should receive50 percent of the difference between their grade and60 percent. Explain why this situation represents atrade-off between equity and efficiency
3. Suppose that the various Balls of basketball or internet fame Lavar, Lamelo, Liangelo, Lonzo,and Spalding are considering playing in a 1-on-1 tournament. They get a payoff of 0 if theydecide not to participate. The following table illustrates their payoffs across the variousscenarios. 1 Player 2 Players 3 Players 4 Players 5 Players Lavar 10 4 2 -2 -5 Lamelo 10 7 5 2 -1 Liangelo 10 7 5 2 -1 Lonzo 10 8 7 6 5 Spalding 10 9 8 7 6 a. Find and describe all pure strategy Nash Equilibria.b. Suppose now Spalding, since it is in fact a literal basketball, gets a payoff of 0 in anycircumstance, being an inanimate object. The table is now as follows: 1 Player 2 Players 3 Players 4Players 5 Players Lavar 10 4 2 -2 -5 Lamelo 10 7 5 2 -1 Liangelo 10 7 5 2 -1 Lonzo 10 8 7 6 5 Spalding 0 0 0 0 0 Find and describe all pure strategy Nash Equilibria.
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You like your job, but your boss gives lousy bonuses. You were recently offered a new job with better rewards and your friend wants to know if you intend to take it. You say, "It depends on whether the bonus this year is generous, Let's wait and see. We'll find out next week" The likely outcome of this game is your boss gives you a ousy :bonus and you ept the new job. If you want to stay at your current job and be better rewarded, you could improve your strategy if you: demand an increase in your bonus by a certain amount, but does not tel your boss about the job offer. adopt a dominant strategy to accept the other position and make this known to your boss. O tell the boss about the job offer you are prepared to take if your bonus structure does not increase by a certain amount. Cadopt a dominant strategy to stay at your current position and make this known to your boss.
Consider a town with a single street of 1 km long with 3,000 people spread uniformly along it. Two stores, 1 and 2, are located at the opposite ends of the street and sell the same product (store 1 is locatedattheleftend).Thecostofwalkingist1 =$6perkmtostore1andt2 =$9perkmtostore2for each consumer. The net utility of a consumer located at point x from buying a product at store 1 is U1(x) = 100 – p1 – t1x, where pi is a price of the product at store i = 1,2. The net utility from buying at store 2 is U2(x) = 100 – p2 – t2(1 – x). The average cost of the product for each store is c = 4. (a) Assume that all consumers buy product from the sellers. Find the demand functions Di(p1,p2) and the profit functions πi(p1,p2) for each store i = 1,2 as functions of prices p1,p2.(b) Find the equilibrium prices.
1) What are the Nash equilibria? Which one is unreasonable/non-credible threat? 2) What are the subgame perfect Nash equilibria? Does SPNE concept eliminate the unreasonable Nash equilibrium?
12. Consider a game where each player picks a number from 0 to 60. The guess that is closest to half ofthe average of the chosen numbers wins a prize. If several peopleare equally close, then they share theprize. The game theory implies that (A) all players have dominant strategies to choose 0 (B) all players have dominant strategies to choose 30 (C) there is a Nash equilibrium where all players pick 0 (D) there is a Nash equilibrium where all players pick positive numbers 13. Behavioral data in such games suggests that (A) most subjects choose 0; (B) most subjects choose 30; (C) common answers include 30, 15, 7.5, and 0; (D) most subjects use randomization. Can you help me answer number 13 please?