Which of the following statements is correct regarding profit- maximizing firms in the long run? In perfect competition, firms produce an output at which price is less than marginal cost. In monopolistic competition, firms produce less than the output at which average total cost is minimized. In perfect competition, firms produce an output at which price is greater than marginal cost. In monopolistic competition, firms produce more than the output at which average total cost is minimized.

N=2 video broadcasting websites, You and Twi, must decide the number of minutes of ads to be displayed for every video that the user elects to watch. Let tY be the number of ad-minutes per video set by You, and tT the number of ad-minutes per video set by Twi. Streaming one video costs You cY=0.02, while it costs Twi cT=0.03. There are 100 million potential users, and each watches videos according to the following demand curves: qY((tY,tT) =10-2tY+tT=10-2tT+tY  a- What is the cross-price elasticity between You and Twi? b- Suppose, for now, that You and Twi enter an (illegal) agreement by which they set tY=tT=t  Derive the total number of users in the market as a function of t. Derive the profits for each website as a function of t. c- Now let the two platforms compete by each setting their number of ad-minutes: i. What is the best reply of You? What is the best reply of Twi? ii. Find the Nash Equilibrium of the game. iii. How many total users choose You and how many total users choose…

21) Games Galore has a new video game that it hopes will increase its sales. It is offering coupons and a sweepstake to get people to buy the game. These are all examples of A) personal selling. B) direct retail. C) publicity. D) sales promotion. E) advertising. 21)

5. To advertise or not to advertise Suppose that two firms, Hatte Latte and Bean Bruuer, are the only sellers of espresso in some hypothetical market. The following payoff matrix gives the profit (in millions of dollars) earned by each company depending on whether or not it chooses to advertise: Hatte Latte Advertise Doesn't Advertise Advertise 10, 10 Bean Bruuer 2,18 Doesn't Advertise 18, 2 11, 11 For example, the lower left cell of the matrix shows that if Bean Bruuer advertises and Hatte Latte does not advertise, Bean Bruuer will make a profit of $18 million, and Hatte Latte will make a profit of $2 million. Assume this is a simultaneous game and that Hatte Latte and Bean Bruuer are both profit-maximizing firms. If Hatte Latte chooses to advertise, it will earn a profit of $ does not advertise. If Hatte Latte chooses not to advertise, it will earn a profit of $ Bruuer does not advertise. million if Bean Bruuer advertises and a profit of $ million if Bean Bruuer advertises and a…