Millie Bush Has Written a Best-Seller

question 33

Multiple Choice

Millie Bush has written a best-seller.Revenues net of production costs are $300T^1/3A^1/3, where T is the number of publicity trips Millie takes and A is the number of ads for the book that appear.Millie has to pay for all of her own publicity trips, which cost $100 each.Her publisher pays for the advertising, which costs $100 per ad.Revenues from the book are split equally between Millie and her publisher.Let T₁ be the number of trips that Millie would choose to make in a Nash equilibrium where she chooses the number of trips and the publisher chooses the amount of advertising.Let T₂ be the number of trips that Millie should make if trips and advertising are determined so as to maximize total profits net of trip and ad costs.

• A)T₁ = 1 and T₂ = 1.
• B)T₁ = 1 and T₂ = 2.
• C)T₁ = 2 and T₂ = 1.
• D)T₁ = 1 and T₂ = 1/8.
• E)T₁ = 1/8 and T₂ =1.

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Definitions:

Situational Leadership Model II

A leadership approach that suggests leaders should adapt their style to the development level of the individuals they are leading, based on their competence and commitment.

Development Level

The current stage of growth or advancement in an individual's skills, knowledge, or experience.

Commitment

Commitment pertains to the state of being dedicated to a cause, activity, or job, showing a willingness to give time and energy to something believed in.

Competence

The ability to do something successfully or efficiently, often referring to a specific skill set or knowledge.