EconomicsForManagersFW7 - ANSWER BOX Questions 1 Answers...

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ANSWER BOX Questions Answers Explanation ( Only if required by the question) 1. *** 2. 3. 4. 5. 6. 7. 8. 9a. 9b. 9c. 9.d 10. *** 11. 12a *** 12b *** 12c *** 12d *** ***. Explanation needed. Please do not clutter the answer box. Thanks.
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Questions: 1.Consider two firms, A and B, that produce super computers. Each can produce the next generation super computer for math (M) or for chip research (C). However, only one can successfully produce for both markets simultaneously. Also, if one produces one type, the other might not be able to successfully produce the same type, because of the limited market. The following payoff matrix illustrates the problem. Firm B M C Firm A M 2, 1 2, 2 C 1, 1 3, 2 Find the Nash equilibrium (include the payoff in your answer), and explain why it is a Nash equilibrium. Scenario BB: ABC Inc. Offer Rebate No Rebate XYZ Corp Offer Rebate 20, 10 30, 0 No Rebate 12, 16 20, 4 2.Which of the following is true about the game in Scenario BB? a. ABC's dominant strategy is to offer a rebate. b. ABC's dominant strategy is not offer a rebate. c. XYZ's dominant strategy is to offer a rebate. d. XYZ's dominant strategy is not offer a rebate. e. Both ABC and XYZ have offer a rebate as a dominant strategy.
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