Consider Two Craft Bourbons Distilled in Brooklyn, New York: Kings

question 60

Essay

Consider two craft bourbons distilled in Brooklyn, New York: Kings County and Stillhouse.If the distilleries advertise, they can both sell more bourbon and increase their revenue.However, the cost of advertising more than offsets the increased revenue so that each distillery ends up with a lower profit than if they do not advertise.On the other hand, if only one advertises, that distillery increases its market share and also its profit.
a.Construct a payoff matrix using the following hypothetical information: If neither distillery advertises, each earns a profit of $500,000 per month.If both advertise, each earns a profit of $250,000 per month.If one advertises and the other does not, the distillery that advertises earns a profit of $750,000 and the distillery that does not advertise earns a profit of $125,000.
b.If Kings County wants to maximize profit, will it advertise? Briefly explain.
c.If Stillhouse wants to maximize profit, will it advertise? Briefly explain.
d.Is there a dominant strategy for each distiller? Briefly explain.

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Comprehend the differences and use of short-term financing options.

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Definitions:

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Haymarket Tragedy

An 1886 incident in Chicago where a peaceful labor demonstration turned violent, leading to death and injuries among police and workers and becoming a pivotal event in labor history.

Strikers

Workers who refuse to work as part of an organized effort to press for changes from their employer, such as better working conditions or increased pay.

Welfare Unionism

A form of unionism that focuses on improving the immediate work environment and living standards of workers, including benefits like health insurance and pensions.