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Ap micro unit 4 imperfect competitiion pg 3

Ap micro unit 4 imperfect competitiion pg 3

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Topic 4.4- Oligopoly and Game Theory Assume that two business owners are deciding Answer the questions using the payoff matrix: between advertising now and advertising later. The 2. If David decides to advertise now and chart shows expected profit with Lindsey's on the left Lindsey decides to do it later, what is David David's expected profit? 1000$ Now Later 3. What is Lindsey's dominant strategy? NOW 4. What is David's dominant strategy? Now None $5,000, $4,000 $3,000, $3,500 5. If both owners have the information but do Lindsey not actively collude, what will be the outcome? both choose now Later $900, $1,000 $1,500, $1,800 Assume the advertising company offers a deal that increases the profit for both owners by 1. Define Nash Equilibrium $2,000 but only if they advertise later. Based on these changes: The optimal outcome where neither player can make themself better 6. What is Lindsey's dominant strategy? now off by choosing a specific strategy. 7. What is David's dominant strategy? later Market Structures Venn Diagram Fill in each area with the different characteristics of the four market structures. Perfect Competition Identical Products No advantages Low Barrier NO LR profit Monopolistic Competition Excess advertising different products ...
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