2002finalpsoln - (a π B C G(1 − π B C B(b γ F = $0...

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2002 Final Examination - Partial Answers 1. PART B: 1. oligopoly/stackelberg (a) q M = 75 , p M = $250 (b) R 2 ( q 1 ) : q 2 = 90 1 2 q 1 (c) MR 1 = 220 2 q 1 (d) q S 1 = 60 , q S 2 = 60 (e) P = $160 , π 1 = 3600 , π 2 = 7200 (f) graph 2. uncertainty (a) E { w } = $63 . 2 (b) var ( w ) = 2031 . 36 (c) sarah accepts Marvin’s o ff er (d) graph (e) $50 , 800 3. insurance
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Unformatted text preview: (a) π B C G (1 − π B ) C B (b) γ F = $0 . 50 (c) C ∗ G = $800 , C ∗ B = $533 . 33 (d) individual pays $200 , insurance company pays out $333 . 00 in the bad state (e) E { pro f ts } = $33 . 33 1...
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