Finding dominant strategies is often a very effective way of analyzing a game. Consider the following game: Microsoft and Apple are the two rms in the market for operating systems. Each rm has two strategies: charge a high price or charge a low plice (payoffs: Microsoft, Apple). Payoff Matrix What (if any) is the dominant strategy for each rm? O A. Choosing low is a weakly dominant strategy for Microsoft. 0 B. The dominant strategy is for Apple to choose low and Microsoft to choose high. Q o. Choosing low is a weakly dominant strategy for Apple. High Apple 0 D. Choosing high is a weakly dominant strategy for Apple. Is there a Nash equilibrium? High Low 0 A. No because Apple is indifferent between choosing high and low. Microsoft I IA @ B. Yes. Apple chooses low and Microsoft chooses high. 0 c. Yes. Apple and Microsoft both choose low. Low 0 D. Yes. Apple and Microsoft both choose high. Coca-cola and Pepsi both advertise aggressively, but would they be better off if they didn't? Their commercials are Pepsi usually not designed to convey new information about their products. Instead, they are designed to capture each Advertisting No advertisting other's customers. The payoff matrix illustrates the following information: $500 $900 > If neither firm advertises, Coca-cola and Pepsi both earn profits of $750 million per year. If both firms advertise, Coca-cola and Pepsi both earn profits of $500 million per year. . Advertising > If Coca-cola advertises and Pepsi doesn't, Coca-cola earns profits of $900 million and Pepsi earns profits of $400 million. $400 > If Pepsi advertises and Coca-cola doesn't, Pepsi earns profits of $900 million and Coca-cola earns profits of Coca-cola $500 $400 million. If Coca-cola wants to maximize profit, they will not advertise No advertising $400 $750 If Pepsi wants to maximize profit, they will |advertise Is there a Nash equilibrium? $900 $750 O A. There is a Nash equilibrium in which Pepsi advertises and Coca-cola does not advertise. O B. There is only a Nash equilibrium in which both firms do not advertise. O C. There is only a Nash equilibrium in which both firms advertise. O D. There is a Nash equilibrium in which both firms advertise and one in which both firms do not advertise.In 2021, Best Buy had the following price-matching policy posted to its website: We match local retail competitors (including their online prices) and these qualifying online retailers: Amazoncom, Crutcheld.com, Dell.com, HP.com, and 'I'IgerDirect.com. Source: "Price Match Guarantee," beslhuy.com, accessed on February 16, 2021. Is Best Buy's policy likely to result in lower prices or higher prices on televisions and other products it sells in competition with Amazon and local brick-and-mortar stores? Briey explain. 0 A. Lower prices, since the price-matching policy will induce Best Buy and its competitors to reach a cooperative equilibrium. 0 B. Higher prices, since Best Buy is attempting to collude with these major online retailers to charge higher prices. 0 C. Lower prices, because this is the most protable strategy for Best Buy, regardless of the price the other rms charge. O D. Higher prices, since the other rms know they would end up in a prisoner's dilemma noncooperative equilibrium. Give an example of a government-imposed barrier to entry. An example of a government-imposed barrier to entry is O A. a tariff on imports. O B. a patent. O C. economies of scale. O D. both a and b. O E. all of the above. Why would the government be willing to erect barriers to entering an industry? The government would be willing to impose barriers to O A. encourage firms to carry out research and development of new and better products. O B. protect the public from incompetent practitioners. O C. protect Canadian firms from international competition. O D. both a and b. O E. all of the above.Erin Reinhardt and her friend Carol Newman have just arrived in the country Boloni for a summer holiday. While renting a car on their rst day in Boloni they notice that the car rental rates are so much higher than rates back home. Carol says that in a matter of time, competition should drive prioes down. Erin feels that the market for car rentals is probably competitive enough; it could just be high cost of operations in Boloni that are responsible for the high prices. Which of the following, if true, would weaken Carol's argument that oompetition will drive prices down? A. The government of Boloni set aside a substantial amount of money this year for the construction of freeways. O E. The car rental industry recently implemented no-show fees for customers who do not pick up their cars after making a reservation. O C. To reduce emissions, the government has recently introduced tax per mile driven on automobiles. O D. Compared to Carol's home oountry, people in Boloni have lower purchasing power. 0 E. Information on car rental rates being easily available, it is almost impossible for rms to charge different consumers different prices