The City of Dustin Is Going to Grant an Exclusive

question 97

Multiple Choice

The city of Dustin is going to grant an exclusive contract to provide cable TV for the next year.The economic profit of the contract is thought to be $5 million.MegaCable and Acme are competing for the contract.The firm that spends the most on lobbying will be awarded the contract.
Suppose MegaCable spends $2,000,002 on lobbying while Acme spends $2,000,001.If both firms know what the other is spending,the expected profit to MegaCable is __________ and to Acme it is __________.

• 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:

Black Box

In technology and psychology, a system or process whose internal workings are not visible or understood but can be observed by its inputs and outputs.

Internalize

The process of integrating beliefs, values, standards, or behaviors within oneself without external influence.

Prospective Buyers

Individuals or entities showing interest in purchasing a product or service, potentially becoming customers.

Product Feature

A characteristic or attribute of a product that is intended to offer value or solve a specific problem for the consumer.