Problem 5. The Airbus and Boeing Company manufacture airplanes and compete in quantities. They face a linear demand curve p = a-Q and marginal cost c where a > 3c. The Airbus board is looking for a new manager to run the company. Three managers apply for the job: T.G. Timid, Bobby Prudent, and Q.A. Bombastic. T.G. Timid is convinced that the cost of producing an airplane is twice as high as it actually is (and makes decisions accordingly). Bobby Prudent has exactly correct beliefs. Q.A. Bombastic believes that the cost of production is only half of the actual cost. Boeing's managers know exactly the beliefs of a manager whom Airbus decides to hire. 1. The Airbus board wants to maximize shareholder value. What manager is the board going to hire? 2. What type of manager would Airbus hire if the firm would be a monopolist (Boeing would not exist)? 3. Explain in words why Airbus might or might not want to hire a different type of manager depending on whether it faces a simple decision problem (monopoly) or a game (duopoly with Boeing)