game theory

1. Using game theory, set up a payoff matrix similar to one that Volkswagen’s management might employ in analyzing the problem presented in Discussion Question 5.
2. Test Yourself Question 4 at the end of Chapter 11 presented cost and demand data for a monopolist and asked you to find the profit-maximizing solution. Use these same data to find the sales-maximizing solution. In terms of the firm’s MR, explain why the answers are different.

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