A) Ken and Pat have been arrested by the police during a robbery at a computer s

Question

A) Ken and Pat have been arrested by the police during a robbery at a computer store. The sentence for robbery is 5 years.

During questioning, the police begin to suspect that Ken and Pat are also responsible for an arson attack on the local bingo hall. If both confess to the arson, each will receive 10 years in jail. If only one confesses, he will receive 4 years and the one who does not confess will receive 18 years.

In this prisoners' dilemma game, each player has ______ possible strategies and there are ______ possible outcomes.

The Nash equilibrium of this game is _______.

A. four; two; both Pat and Ken deny

B. two; four; both Pat and Ken deny

C. four; two; one prisoner will confess and one will deny, but we don't know who

D.two; four; both Pat and Ken confess

B) The dry cleaning industry is in monopolistic competition.

In the short run, the profit-maximizing price is $10 per item and the average total cost is $6 per item. In the long run, the profit-maximizing price is $8 per item.

In the long run, what is the economic profit of a firm in the dry cleaning industry?

In the long run, the economic profit of a firm in the dry cleaning industry is ________$

Explanation / Answer

In this prisoners' dilemma game, each player has dominant possible strategies and there are best possible outcomes.

The Nash equilibrium of this game is _______.

D.two; four; both Pat and Ken confess

Explanation-Both players cannot coordinate with each other.As we know that in prisoner's dilemma both players confess because of the fear that if other one one confesses he has to suffer more time in jail.

B). Total Profit =

Total profit (Average Revenue - Average Total Cost) * Quantity.

Average Revenue = P = $8

So total profit=(8-6)*Q=$2Q

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.