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Vika [28.1K]
3 years ago
10

Firm 1 and firm 2 are competing for a franchise. The present value of the net revenues generated by the franchise are equal to R

. Each firm’s probability of winning the franchise is given by its proportion of the total spent by the two firms on lobbying the local government committee that awards the franchise. That is, if I1 and I2 represent the lobbying expenditures of firms 1 and 2, respectively, then firm 1’s probability of winning is given by I1/(I1 + I2), while firm 2’s probability of winning is I2/(I1 + I2). If each firm assumes that the other firm’s spending is independent of its own, what is the equilibrium level of spending for each firm?
Business
1 answer:
kvasek [131]3 years ago
7 0

Answer:

Equilibrium level of spending = R

Explanation:

Firm 1 : I1 ( lobbying expenditure ) , P of firm 1 = I1/(I1 + I2 )

Firm 2 : I2( lobbying expenditure) , P of firm 2 = I2/(I1 + I2 )

The equilibrium level of spending for each firm will be = present value of net revenues that is being generated by the Franchise

i.e. equilibrium level of spending = R

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3 years ago
Three months ago, Central Supply stock was selling for $51.40 a share. At that time, you purchased five put options on the stock
oee [108]

Answer:

$4,350

Explanation:

Calculation to determine your net profit or loss on this investment

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Edelman engines has $20 billion in total assets. Its balance sheet shows $2 billion in current liabilities, $10 billion in long-
Lemur [1.5K]

<u>Calculation of Edelman's market/book ratio:</u>


The market/book ratio is calculated with the help of following formula:

Market/book ratio = Market price per share / Book value per share


The Book value per share can be calculated as follows;

Book value per share =Common Equity/ Shares of common stock outstanding

= 8,000,000,000 /500,000,000

= 16

Hence ,

Market/book ratio = 25/16 = 1.56


Hence, Edelman's market/book ratio is <u>1.56</u>





5 0
3 years ago
Tommy Richards is paid $20.50 an hour for a regular 40-hour week. He earns time and a half if he works overtime. This week Richa
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Answer:

$1,094.50

Explanation:

Regular pay is $20.50

Over time pay is $20.50 x 1.5 = $30.75

Tommy earned as follows.

Regular hours : 40 x $20.50 = $820

Overtime hours: 9 x $30.75 =$274.50

Total amount earned

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=$1,094.50

7 0
3 years ago
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