Use the Following Information to Answer Question

question 52

Multiple Choice

Use the following information to answer question:
Suppose that you are a manager.You are considering whether or not to monitor employees with the payoffs in the following normal form game.
-Management and a labor union are bargaining over how much of a $50 surplus to give to the union.The $50 is divisible up to one cent.The players have one-shot to reach an agreement.Management has the ability to announce what it wants first, and then the labor union can accept or reject the offer.Both players get zero if the total amounts asked for exceed $50.Which of the following is a perfect equilibrium?

• A)Management requests $49.99, and the labor union accepts $0.01.
• B)Management requests $25, and the labor union accepts $25.
• C)Management requests $0, and the labor union accepts $50.
• D)None of the statements associated with this question are correct.

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Definitions:

Leap Year

A year consisting of 366 days, with an extra day added to February, occurring every four years to help synchronize the calendar year with the solar year.

Accounts Payable

A liability account tracking amounts owed by a company to suppliers or creditors for goods and services received.

Time Extension

The act of prolonging a period or deadline, allowing more time for completion of a task or obligation.