Two startups, Ultra and Soar, have develop fairly similar ridesharing apps and are competing for customers by deciding how much to advertise their app. Let Ai ≥ 0 be the advertising level of firm i. The profits of each firm depend on how much it advertises its app but also on the advertising level of its opponent A−i . The higher the advertising levels the more visibility ridesharing apps and demand increases. In particular, firm i’s profits are ui(Ai , A−i) = (90 + Ai + A−i)Ai − 2A2 i . Ultra chooses A1 first and, after observing it, Soar chooses A2.

(a) Draw the extensive form. Which are the proper subgames?
(b) Find the SPNE. How does it compare to the NE of the simultaneous move game?
(c) Is there a first-mover advantage in the market? Justify your answer

Label each scenario with the term that best describes it. use the midpoint method when applicable. marcel duchamp was a famous artist prior to his death, and was known for his dada artwork, including works such as "soft toilet". all of his original sculptures and paintings go on sale. paul owns a tim horton's, a famous donut and coffee franchise. he is willing to sell as many maple glazed donuts as customers want at a price of $1.00 each, but he refuses to sell any donuts for any price lower than $1.00 . the price of facial tissues rises from $2.85 per box to $3.15 . as a result, p& g increases production from 15 million boxes to 25 million boxes of facial tissue. with the school semester starting for both high school and college, papermate chooses to increase production of pens from 38 million to 42 million after global prices of writing instruments increase from $1.90 a package to $2.10 a package. bright ideas increases its production of lightbulbs by 15% after a 400% increase in the price of fluorescent bulbs.labels: elastic supply; perfectly inelastic supply; perfectly elastic supply; inelastic supply; unit-elastic supply.

Problem 9-5. net present value and taxes [lo 1, 2] penguin productions is evaluating a film project. the president of penguin estimates that the film will cost $20,000,000 to produce. in its first year, the film is expected to generate $16,500,000 in net revenue, after which the film will be released to video. video is expected to generate $10,000,000 in net revenue in its first year, $2,500,000 in its second year, and $1,000,000 in its third year. for tax purposes, amortization of the cost of the film will be $12,000,000 in year 1 and $8,000,000 in year 2. the company’s tax rate is 35 percent, and the company requires a 12 percent rate of return on its films. required what is the net present value of the film project? to simplify, assume that all outlays to produce the film occur at time 0. should the company produce the film?

If the findings and the results are not presented properly, the research completed was a waste of time and money. true false