Consider a remote town in which two restaurants, all-you-can-eat cafe? and goodgrub diner, operate in a duopoly. both restaurants disregard health and safety regulations, but they continue to have customers because they are the only restaurants within 80 miles of town. both restaurants know that if they clean up, they will attract more customers, but this also means that they will have to pay workers to do the cleaning.

if neither restaurant cleans, each will earn $14,000; alternatively, if they both hire workers to clean, each will earn only $11,000. however, if one cleans and the other doesn't, more customers will choose the cleaner restaurant; the cleaner restaurant will make $18,000, and the other restaurant will make only $6,000.

complete the following payoff matrix using the previous information. (note: all-you-can-eat cafe? and goodgrub diner are both profit-maximizing firms.)
if all-you-can-eat cafe? and goodgrub diner decide to collude, the outcome of this game is as follows: all-you-can-eat cafe? (clean/does not clean) and goodgrub diner (clean/does not clean) .

if both restaurants decide to cheat and behave noncooperatively, the outcome reflecting the unique nash equilibrium of this game is as follows: all-you-can-eat cafe? (clean/does not clean), and goodgrub diner(clean/does not clean) .

The lee family is looking to buy a house in one of two suburban areas just outside of a major city, and air quality is a top priority for them. overall air quality is calculated by taking measures in 100 locations within each suburb and then calculating a measure of central tendency. in one suburb, there is a major bus station that creates very poor air quality at its location but has no impact in the surrounding parts of the suburb. in this situation, which measure of overall suburb air quality would be most useful?

Carlton industries is considering a new project that they plan to price at $74.00 per unit. the variable costs are estimated at $39.22 per unit and total fixed costs are estimated at $12,085. the initial investment required is $8,000 and the project has an estimated life of 4 years. the firm requires a return of 8 percent. ignore the effect of taxes. what is the degree of operating leverage at the financial break-even level of output?

Aeuropean aircraft producer has spent 15 years in developing a new aircraft that would potential threaten long-lasting boeing's dominance (monopoly) in the same class of aircrafts. the new european aircraft gets high marks on all performance measures except noise. because of the noise, the european producers management is concerned that the us government may impose restrictions which would forbid their aircraft to land in some of the american airports. without restrictions the estimated (present discounted) profit would be 125 million usd. with the restrictions the profit would only be 25 million usd. the chances of both outcomes are estimated to be 50-50. management must decide now whether to the cost of redesign program problem and a 60% chance it will fail. should the european aircraft producer start the noise redesign program if they do not have any redesign parts of the aircraft to solve the noise problem. is 25 million usd. there is a 40% chance that redesign will solve the noise additional information than mentioned above? draw the decision tree, indicate probabilities and outcomes of the events * imagine that the company could find out in advance the outcome of the u.s. government's e find the expected value of perfect information about the u.s. government's decision. decision. draw a new decision tree, indicate probabilities and outcomes of the events.