MegaCable and Acme Are Competing for an Exclusive Contract to Provide

question 67

Multiple Choice

MegaCable and Acme are competing for an exclusive contract to provide the city of Dustin with cable television for the next year. The firm that wins the contract will earn an economic profit of $5 million. The contact will be awarded to the firm that spends the most on lobbying. If both firms spend the same amount on lobbying, then the winner will be determined by a coin flip, so each will have a 50 percent chance of winning.  
Suppose MegaCable spends $2,000,002 on lobbying, and Acme spends $2,000,001 on lobbying. In this case, MegaCable's economic profit net of its lobbying costs will be ________, and Acme's economic profit net of its lobbying costs will be ________.

• A)$5 million; 0
• B)$2,999,998; -$2,000,001
• C)$2.5 million; $2.5 million
• D)$499,998; -$2,000,001

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Definitions:

Subliminal Activation

Involves stimuli influencing perception or behavior without becoming consciously recognized.

Dispositional Traits

Enduring personality traits that consistently influence an individual's behavior or attitudes across different situations.

Personal Concerns

Issues or matters that are of significant interest or importance to an individual, often relating to their personal life and well-being.

Life Narrative

The story a person tells about their own life, encompassing events, experiences, and interpretations that give personal meaning and identity.