Suppose all individuals are identical, and their monthly demand for Internet access from a certain leading provider can be represented as p = 5 - (1/2)q where p is price in per hour and q is hours per month. The firm faces a constant marginal cost of 1. If the firm will charge a monthly access fee plus a per hour rate, the monthly access fee will equal
A) 1.
B) 5.
C) 8.
D) 16.
Question 2
If the payoff to the United States to pursuing nuclear weapons is 100 if the USSR does not pursue nuclear weapons and 50 if they do, and the payoff to the USSR to pursuing nuclear weapons is 80 if the USA doesn't pursue nuclear weapons and 30 if they do, what is the non-cooperative equilibrium?
A) The USA pursues nuclear weapons, the USSR does not.
B) The USA pursues nuclear weapons, the USSR pursues nuclear weapons.
C) The USA does not pursue nuclear weapons, the USSR does not pursue nuclear weapons.
D) The USA does not pursue nuclear weapons, the USSR does pursue nuclear weapons.
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