Two firms in a market sell identical goods and charge a price ofâ $5 per unit.â However, the cost of a crucial input used in producing these goods has increased. As aâ result, both firms are considering increasing the price of the good toâ $6. If the firms do not raise their prices at the sameâ time, the firm that raises the price stands to lose market share. The payoff matrix shows their respective payoffs on the basis of the prices charged by them.â Here, payoffs denote the number of units sold by each firm. The first number listed in each cell is the payoff to the row player and the second number listed is the payoff to the column player. Firm 2
Price = $5 Price = $6
Firm 1 Price =$5 50 100
50 0

Price =$6 0 40
100 40

Which of the following is true in thisâ case?

a. Firmâ 2's dominant strategy is to chargeâ $6.
b. Firmâ 1's dominant strategy is to chargeâ $6.
c. Firmâ 1's dominant strategy is to chargeâ $5.
d. This game does not have a dominant strategy equilibrium.

James albemarle created a trust fund at the beginning of 2016. the income from this fund will go to his son edward. when edward reaches the age of 25, the principal of the fund will be conveyed to united charities of cleveland. mr. albemarle specified that 75 percent of trustee fees are to be paid from principal. terry jones, cpa, is the trustee. james albemarle transferred cash of $500,000, stocks worth $400,000, and rental property valued at $250,000 to the trustee of this fund. immediately invested cash of $360,000 in bonds issued by the u.s. government. commissions of $7,900 are paid on this transaction. incurred permanent repairs of $9,000 so that the property can be rented. payment is made immediately. received dividends of $8,000. of this amount, $3,000 had been declared prior to the creation of the trust fund. paid insurance expense of $4,000 on the rental property. received rental income of $10,000. paid $8,000 from the trust for trustee services rendered. conveyed cash of $7,000 to edward albemarle.

Burke enterprises is considering a machine costing $30 billion that will result in initial after-tax cash savings of $3.7 billion at the end of the first year, and these savings will grow at a rate of 2 percent per year for 11 years. after 11 years, the company can sell the parts for $5 billion. burke has a target debt/equity ratio of 1.2, a beta of 1.79. you estimate that the return on the market is 7.5% and t-bills are currently yielding 2.5%. burke has two issuances of bonds outstanding. the first has 200,000 bonds trading at 98% of par, with coupons of 5%, face of $1000, and maturity of 5 years. the second has 500,000 bonds trading at par, with coupons of 7.5%, face of $1000, and maturity of 12 years. kate, the ceo, usually applies an adjustment factor to the discount rate of +2 for such highly innovative projects. should the company take on the project?

Any point on a country's production possibilities frontier represents a combination of two goods that an economy: