The unlabeled red curves shown before illustrate the:
a. long-run average-total-cost curves of various firms constituting the industry.
b. short-run average-total-cost curves of various firms constituting the industry.
c. short-run average-total-cost curves of various plant sizes available to a particular firm.
d. short-run marginal-cost curves of various plant sizes available to a particular firm.
In this multiple-choice question, we are asked to indicate which option is correct for the unlabeled red curves in Figure 7.8.
Is the game shown before a zero-sum game or is it a positive-sum game? How can you tell? Are there dominant strategies in this game? If so, what are they? What cell represents a Nash equilibrium and why? Explain why it is so difficult for Uptown and RareAir to achieve and maintain a more favorable cell than the Nash equilibrium in this single-period pricing game.
Gomez runs a small pottery firm. He hires one helper at $12,000 per year, pays annual rent of$5,000 for his shop, and spends $20,000 per year on materials. He has$40,000 of his own funds invested in equipment (pottery wheels, kilns, and so forth) that could earn him $4,000 per year if alternatively invested. He has been offered$15,000 per year to work as a potter for a competitor. He estimates his entrepreneurial talents are worth $3,000 per year. Total annual revenue from pottery sales is$72,000. Calculate the accounting profit and the economic profit for Gomez’s pottery firm