ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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PLS HELP ASAP ON BOTH
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- PLS HELP ASAP ON BOTHarrow_forwardTwo rival communications companies (Alpha and Beta) are both considering bringing out a revolutionary 8G wireless technology. Unfortunately, the costs of development are so high that the potential market could only support one firm. Both companies understand these possible outcomes. If one firm enters the 8G market and the other does not, the entering firm will receive $500 billion in profits over the next 5 years; the other firm will receive $100 billion over the same 5 years (by concentrating on their current 5G service). If neither enters the 8G field, they can both expect to receive $75 billion over the 5-year period, as they fight over the 5G market. Lastly, if both enter the 8G market, each will end up suffering a $50 billion loss over the same 5 years. Use a game table with “ENTER” and “STAY OUT” to decide each player’s options and the payoffs. Explain why each company has a strong reason to want to announce its intentions before the other company announces theirs.arrow_forwardB9arrow_forward
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- do it fast pleasearrow_forwardA typical worker will earn £300k in their youth and £600k in middle-age.. lifetime, they must choose between two "goods": consumption in their youth and consumption in middle-age. When young, the worker has the option of putting their earnings in the bank at an interest rate of 0% - these savings can then be spent in middle-age. Alternatively, they can borrow money from the bank when young. This loan must be paid back in middle-age at a 100% interest rate. (a) What is the maximum amount of money the worker can borrow when young? (b) Draw a large graph with "consumption when young" on the vertical axis and "consumption in middle-age" on the horizontal axis. Represent the worker's budget set. Note: both axes should be labelled from £0 to £1,000k. (c) The government wishes to stimulate spending, and writes a law to reduce the interest rate from 100% to 0%. On the same graph, show the effect of this policy on the worker's budget set. Show the effect of this change on consumption for…arrow_forwardAlso write interpretation of answer and give real life example.arrow_forward
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