Reference no: EM132781344
Question 1: Two mining companies, Fox and Trot, bid for the right to drill a field. The possible bids are $ 15 Million, $ 25 Million, $ 35 Million, $ 45 Million and $ 50 Million. The winner is the company with the higher bid.
The two companies decide that in the case of a tie (equal bids), Fox is the winner and will get the field.
Fox has ordered a geological survey and, based on the report from the survey, concludes that getting the field for more than $ 45 Million is as bad as not getting it (assume loss), except in case of a tie (assume win).
(a) State reasons why/how this game can be described as a two-players-zero-sum game.
(b) Considering all possible combinations of bids, formulate the payoff matrix for the game.
(c) Explain what is a saddle point. Verify: does the game have a saddle point?
(d) Construct a linear programming model for Company Trot in this game.
(e) Produce an appropriate code to solve the linear programming model in part (d).
(f) Solve the game for Trot using the linear programming model and the code you constructed in parts (d) and (e). Interpret your solution.
Question 2: Consider two factories, Factory A and Factory B, producing the same model of iPads. The demand for the iPads produced by Company A is DA, and the demand for the iPads produced by Company B is Dg. The demands are described by the following functions:
DA = 200 - PA - (PA - P) (1)
DB=200-PB-(PB-P) (2)
where PA and PH are the prices of iPad for Factory A and Factory 13 respectively, and P is the average price over the prices PA and PH. For each company, the cost for producing one iPad is C = 20. Suppose that each company can only choose one of the three prices (60,70,80 for a sale.
(a) Compute the profits of each factory under all sale price combinations and produce the payoff matrix for each company.
(b) Find the Nash equilibrium of this game. What are the profits at this equilibrium? Explain your reason clearly.
(C) If the cast C = 30, would the Nash equilibrium from part (b) change? Give clear reasons.
|
What the initial cost of equipment is
: What the initial cost of equipment is? The P10 par value shares were acquired for P12 and were quoted at P18 while the truck's fair value was P245,000
|
|
What is corporate vale
: 1,345, & 1,360 (i.e. FCF1 - FCF 5). She calculates weight average cost of capital (WACC) of her company for 8%. What is her corporate value (V)?
|
|
What are the transactions normally debited and credited
: What are the transactions normally debited and credited to the partner's capital account? 13. What are the transactions normally debited and credited
|
|
Why do profit agreements provide for salary allowances
: Explain Why is interest on partner's capital allowed in the distribution of profit ? Is it allowed even if the operations resulted to a loss?
|
|
Construct a linear programming model for Company
: Construct a linear programming model for Company Trot in this game - Solve the game for Trot using the linear programming model and the code
|
|
Does an industrial partner share in losses always
: If there is an agreement as to the distribution of profits only, how will losses be divided? Does an industrial partner share in losses always? Explain.
|
|
What is Phoenix consolidated retained earnings balance
: Each year since the acquisition, Sedona has declared a $13,000 dividend. What is Phoenix's consolidated retained earnings balance at December 31, 2018
|
|
What will be the basis for the distribution of profits
: If there is no partnership agreement as to the division of profits and losses, what will be the basis for the distribution of profits or losses?
|
|
Compute the cost of each machine
: Compute the cost of each machine. At the beginning of the year, Grillo Industries bought three used machines from Freeman Incorporated
|