AedriQuick Lesson in Game TheoryA Nash Equilibrium is an outcome in which neither player is better off by changing their strategy.2.7 Is a Dominant Strategy equilibrium also a Nash equilibrium?a) Yesb) NoescThe Ice Cream Guys$3.99$4.99+Chucky'sChunkyCCT: $20,000$3.99 ICG: $20,000CCT: $60,000ICG: $10,000tabTreatsCCT: $10,000$4.99 ICG: $60,000CCT: $40,000ICG: $40,000The table above is the payoff matrix for the annual profit of the only two ice-cream-truck firmsoperating in Beach City. They are deciding the price of an ice cream cone.%3Dcaps lo2.8 What is Chucky's dominant strategy?a) $3.99b) $4.99c) Not enough informationhift2.9 What is the dominant strategy equilibrium in this situation?a) Both charge $3.99b) Both charge $4.99c) CCT charges $3.99 and ICG charges $4.99d) CCT charges $4.99 and ICG charges $3.992.10 Suppose these two firms engaged in collusion (which, of course, totally doesn't happen because itis against the law). Which outcome would they agree upon, if any?a) Both charge $3.99b) Both charge $4.99c) CCT charges $3.99 and ICG charges $4.99d) CCT charges $4.99 and ICG charges $3.99e) Firms would not collude, even if it was legal2.11 (extra credit] If the firms were to collude, would that outcome be a Nash equilibrium?a) Yesb) Noc) Can never be determinedd) Need more information2.12 Which of the following market structures describes the ice-cream-truck industry in Beach City?a) Monopolyb) Oligopolyc) Monopolistic competitiond) Pure competition

The dominant strategy is the best course of action no matter what do the other players follow.

Quick Lesson in Game Theory A Nash Equilibrium is an outcome in which neither player is better off E 2.7 Is a Dominant Strategy equilibrium also a Nash equilibrium? a) Yes b) No The Ice Cream Guys $3.99 $4.99 Chucky's Chunky Treats CCT: $20,000 CCT: $60,000 ICG: $10,000 $3.99 ICG: $20,000 ССт: $10,000 ССТ: $40,000

Quick Lesson in Game Theory A Nash Equilibrium is an outcome in which neither player is better off E 2.7 Is a Dominant Strategy equilibrium also a Nash equilibrium? a) Yes b) No The Ice Cream Guys $3.99 $4.99 Chucky's Chunky Treats CCT: $20,000 CCT: $60,000 ICG: $10,000 $3.99 ICG: $20,000 ССт: $10,000 ССТ: $40,000

Principles of Economics (MindTap Course List)

8th Edition

ISBN:9781305585126

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter17: Oligopoly

Section: Chapter Questions

Problem 5CQQ

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