Because cooking souffls is incredibly difficult, the supply of souffls in a small French town is controlled by two bakers, Gaston and Pierre. The demand for souffls is given by =302P=302Q, and the marginal and average total cost of producing souffls is $6. Suppose Gaston and Pierre are each faced with the choice of baking 3 or 4 souffls each morning.

a. In the table, specify the profits each would earn based on the decisions they make, with Gastons profit on the left and Pierres on the right.

		Pierre
		Bake 4 Souffls	Bake 3 Souffls
Gaston	Bake 4 Souffls	;	;
	Bake 3 Souffls	;	;

b. Gaston's profits depend

A. exclusively on the number of souffls he bakes.

B. exclusively on the number of souffls Pierre bakes.

C. on random events over which he has no control.

D. partly on the number of souffls he bakes and partly on the number of souffls Pierre bakes.

c. How would the situation of Gaston and Pierre compare with that of Disney and Warner Brothers, depicted in Table 11.1 in the chapter?

A. Unlike Disney and Warner Brothers, Gaston and Pierre are led by individual incentives to a collectively optimal outcome.

B. Unlike Disney and Warner Brothers, Gaston and Pierre are led by individual incentives to a collectively suboptimal outcome.

C. Like Disney and Warner Brothers, Gaston and Pierre are led by individual incentives to a collectively optimal outcome.

D. Like Disney and Warner Brothers, Gaston and Pierre are led by individual incentives to a collectively suboptimal outcome.