What would the profits be for Mattie's Dairy if Irene does not enter the market?
a. 5million
b. 10million
c. 15million
d. Zero
QUESTION 2A firm sells 1000 units per week. It charges 70 per unit, the average variable costs are 25, and the average costs are 65 . At what price would the firm consider shutting down in the short run?
a. 10
b. 25
c. 65
d. 70
QUESTION 3What would the Nash equilibrium be in this sequential game?
a. Enter, fight
b. Enter, Accommodate
c. Do not enter, Fight
d. Do not enter, Accommodate
QUESTION 4A firm sells 1000 units per week. It charges 70 per unit, the average variable costs are 25, and the average costs are 65 . In the long run, the firm should
a. Shut down since price is greater than average cost
b. Continue operating price is higher than average cost, its making a profit
c. Continue operating as the firm is covering all the variable costs and some of the fixed costs
d. Shut-down because it is cost effective to pay off the remaining fixed costs
QUESTION 5In a sequential game, given Mattie's best response function, what would Irene's best response be?
a. Not enter the market
b. Enter the market
c. Fight
d. Run away
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