A restaurant mixes homemade barbecue sauce with their smoked pulled pork using a ratio of two cups of sauce for every four pound
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Answer:
a) attached below
b) ( T,T )
c) The Pure-strategy Nash equilibria are : ( N,E ) and ( E,N )
d) The mixed-strategy Nash equilibrium for Firm 1 = ( 1/3 , 0, 2/3 )
while the mixed -strategy Nash equilibrium for Firm 2 = ( 1/3 , 0, 2/3 )
Step-by-step explanation:
A) write down the game in matrix form
let: E = exit at the industry immediately
T = exit at the end of the quarter
N = exit at the end of the next quarter
matrix is attached below
B) weakly dominated strategies is ( T,T )
C) Find the pure-strategy Nash equilibria
The Pure-strategy Nash equilibria are : ( N,E ) and ( E,N )
D ) Find the unique mixed-strategy Nash equilibrium
The mixed-strategy Nash equilibrium for Firm 1 = ( 1/3 , 0, 2/3 )
while the mixed -strategy Nash equilibrium for Firm 2 = ( 1/3 , 0, 2/3 ) since T is weakly dominated then the mixed strategy will be NE
Assume that P is the probability of firm 1 exiting immediately ( E )
and q is the probability of firm 1 staying till next term ( N ) ∴ q = 1 - P.
hence the expected utility of firm 2 choosing E = 0 while the expected utility of choosing N = 4p - 2q .
The expected utilities of E and N to firm 2 =
0 = 4p - 2q = 4p - 2 ( 1-p) = 6p -2 which means : p = 1/3 , q = 2/3
A total of 168 non-commercial vehicles and 60 commercial vehicles use the country's highways during September.
Step-by-step explanation:
Step 1:
Assume the number of non-commercial vehicles to be x and the number of commercial vehicles to be y.
It is given that for every 14 non-commercial vehicles there will be 5 commercial vehicles. So a ratio can be formed as follows;
=
, cross multiplying, we get
, take this as equation 1.
Step 2:
It is also given that there were 108 more non-commercial vehicles than commercial vehicles. So
, take this as equation 2.
If we solve equations 1 and 2, we will get the values of x and y.
Step 3;
Substitute equation 2 in equation 1.
,
,
.
Substitute in equation 2.
.
So x = 168 and y = 60.
So a total of 168 non-commercial vehicles and 60 commercial vehicles use the country's highways during September.