Consider the rivalry between Airbus and Boeing to develop a new commercial jet aircraft. Suppose Boeing is ahead in the development process and Airbus is considering whether to enter the competition. If Airbus stays out, earns zero profit, whereas Boeing enjoys a monopoly and earns a profit of S1 billion. If Airbus decides to enter and develop the rival airplane, then Boeing has to decide whether to accommodate Airbus peacefully or to wage a price war. In the event of peaceful competition, each firm will make a profit of $300 million. If there is a price war, each will lose S100 millon because the prices of airplanes will fall so low that neither firm will be able to recoup its development cost. a. Draw the game in normal form and find the Nash Equilibrium b. Draw the game tree for this game. Identify the equilibrium path on the game tree. Find the Subgame Perfect Nash Equilibrium. Is there any Nash equilibrium that is not sensible? Explain your answer. c.

He set of companies a product goes through on the way to the consumer is called the a. economic utility b. cottage industry c. market saturation d. distribution chain

Journalize the following transactions that occurred in september 2015 for aquamarines. no explanations are needed. identify each accounts payable and accounts receivable with the vendor or customer name. sep. 3 purchased merchandise inventory on account from shallin wholesalers, $5,000. terms 1/15, n/eom, fob shipping point. 4 paid freight bill of $80 on september 3 purchase. 4 purchased merchandise inventory for cash of $1,700. 6 returned $500 of inventory from september 3 purchase. 8 sold merchandise inventory to hermosa company, $6,000, on account. terms 2/15, n/35. cost of goods, $2,640. 9 purchased merchandise inventory on account from thomas wholesalers, $8,000. terms 2/10, n/30, fob destination. 10 made payment to shallin wholesalers for goods purchased on september 3, less return and discount. 12 received payment from hermosa company, less discount. 13 after negotiations, received a $200 allowance from thomas wholesalers. 15 sold merchandise inventory to jordan company, $2,500, on account. terms 1/10, n/eom. cost of goods, $1,050. 22 made payment, less allowance, to thomas wholesalers for goods purchased on september 9. 23 jordan company returned $400 of the merchandise sold on september 15. cost of goods, $160. 25 sold merchandise inventory to smithsons for $1,100 on account that cost $400. terms of 2/10, n/30 were offered, fob shipping point. as a courtesy to smithsons, $75 of freight was added to the invoice for which cash was paid by aquamarines. 26 after negotiations, granted a $100 allowance to smithsons for merchandise purchased on september 25. 29 received payment from smithsons, less allowance and discount. 30 received payment from jordan company, less return.

Why is efficiency an important economic goal?