What happened to the price and quantity bell-bottom pants when they become popular? Tour Seach for VALUE Ends at Penneys

A computer reseller needs to decide how many laptops to order next month. The lowest end laptop costs $220 and the retailer can sell these for $300. However, the laptop manufacturer already announced that they are coming out with a new model in a couple of months. Any laptops that will not be sold by the end of next month will have to be heavily discounted at half-price. The reseller also needs to consider that every time he fails to fulfill a laptop order, he stands to lose $25 for every unit. Based on the past months’ sales, the reseller estimates the demand probabilities for sales (S) as follows: P(0 units) = 0.3; P(1 units) = 0.4; P(2 units) = 0.2; P(3 units) =0.1. The reseller thinks it’s a good idea to conduct a survey on whether or not his customers are going to buy laptops and how many. The survey results will either be Yes (Y), No (N) or Don’t Know (DK). The probability estimates of the results based on the demand for number of units are:    P(Y|S = 0 units) = 0.1    P(Y|S = 1…

COVID-19 has caused several shortages: paper products, hand sanitizer, and even nurses. When a hospital needs nurses, they might call Fastaff, which has been sending its nurses all around the country. Once a nurse gets an assignment, they pack their bags and need to be there within a week. During a pandemic, these assignments come with some risk, but these nurses are well compensated for their time. “They really run into the fire,” explained Fastaff Senior VP of Marketing Lauren Pasquale-Bartlett. “They’re very brave, they’re like the special forces of nursing. They go in for these really critical assignments.” The need for traveling nurses across the country has increased drastically because of the coronavirus pandemic. One of the state’s needing nurses is Ohio, according to Pasquale-Bartlett. “Particularly in the last few weeks we’ve seen a two to three increase in demand in requests for nurses to come in and support the staff,” she said. “That really indicates to us that it’s an…

Suppose that you own a used car dealership. You want to sell a 2005 Honda Civic LX. You know that this car is of high quality, and it cost you $5000 to acquire it (so you will not sell it at a price below $5000). However, consumers cannot see the quality of the car at the time of purchase. They believe that 25% of the cars in the used car market are high-quality cars and 75% are low-quality cars or “lemons.” A typical lemon costs $2000 to acquire (so you will not sell it at a price below $2000). Consumers are eager to buy and are willing to pay up to $3000 for a lemon and $6000 for a high-quality car. From now on, suppose that only you (the seller) know the quality of the cars. (Buyers do not know the quality, but know the proportion of high- and low-quality cars in the market). Suppose that you could offer bumper-to-bumper warranties. You know that offering a warranty on a high-quality car costs, on average, $450 per year of warranty offered, while a warranty on a lemon is very…

Let's say we have a game called "guess 2/3 of the average," where players can choose any number x ∈ [0, 100]. 5% of players are at level N0, 40% at level N1, 35% at level N2, 15% at level N3, and 5% at level N4. Players at level N0 choose a number randomly, while players at higher levels choose a number according to their beliefs, which are as follows: players at higher levels believe that all other players are one level lower than themselves. (a) What will be the winning number and which level players will be the winners? (b) Under the assumptions of classical game theory, the mentioned version of the game "guess 2/3 of the average" has exactly one equilibrium, in which everyone chooses the number 0. Prove that this outcome is indeed a Nash equilibrium of the game.

Q19

Jack and Diane work at a bakery. Jack can make either five batches of cookies or two cakes per hour, while Diane can make either four batches of cookies or three cakes per hour. At 9:00 a.m. they receive an order for 24 batches of cookies and nine cakes. What time is the soonest they can have the order ready?

The research department at a manufacturing company has developed a new process that it believes will result in an improved product Management must decide whether to go ahead and market the new product. The new product may or may not be better than the old one. If the new product is better and the company decides to market it, sales should increase by $50,000. If it is not better and they replace the old product with the new product on the market, they will lose $24,000 to competitors. If they decide not to market the new product, they will lose a total of $30,000 if it is better and just research costs of $10,000 if it is not. Answer parts a through c below. (a) Prepare a payoff matrix. (Type an integer or decimal for each matrix element. Do not include the $ symbol in your answer.) (b) If management believes there is a probability of 0.4 that the new product is better, find the expected profits under each strategy and determine the best action. Select the correct answer below and fill…

Matthew is playing snooker (more difficult variant of pool) with his friend. He is not sure which strategy to choose for his next shot. He can try and pot a relatively difficult red ball (strategy R1), which he will pot with probability 0.4. If he pots it, he will have to play the black ball, which he will pot with probability 0.3. His second option (strategy R2) is to try and pot a relatively easy red, which he will pot with probability 0.7. If he pots it, he will have to play the blue ball, which he will pot with probability 0.6. His third option, (strategy R3) is to play safe, meaning not trying to pot any ball and give a difficult shot for his opponent to then make a foul, which will give Matthew 4 points with probability 0.5. If potted, the red balls are worth 1 point each, while the blue ball is worth 5 points, and the black ball 7 points. If he does not pot any ball, he gets 0 point. By using the EMV rule, which strategy should Matthew choose? And what is his expected…

If you choose two people at random, what is the probability that both have the same blood type?