Imperfect Competition End of Chapter Problem

Consider the souffl bakers Gaston and Pierre, described in Problem 3. Suppose Gaston and Pierre are each faced with the choice of baking 3 or 4 souffls each morning.

a.In the table, specify the profit

Imperfect Competition - End of Chapter Problem Consider the souffle bakers Gaston and Pierre, described in Problem 3. Suppose Gaston and Pierre are each faced with the choice of baking 3 or 4 souffles each morning. a. In the table, specify the profits each would earn based on the decisions they make, with Gaston's profit on the left and Pierre's on the right. Pierre Bake 4 Souffles Bake 3 Souffles Gaston Bake 4 Souffles 36 40 30 36 32 Bake 3 Souffles b. Gaston's profits depend on random events over which he has no control. exclusively on the number of souffles he bakes. partly on the number of souffles he bakes and partly on the number of souffles Pierre bakes. exclusively on the number of souffles 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? Like Disney and Warner Brothers, Gaston and Pierre are led by individual incentives to a collectively optimal outcome Unlike Disney and Warner Brothers, Gaston and Pierre are led by individual incentives to a collectively optimal outcome. Unlike Disney and Warner Brothers, Gaston and Pierre are led by individual incentives to a collectively suboptimal outcome Like Disney and Warner Brothers, Gaston and Pierre are led by individual incentives to a collectively suboptimal outcome