Author Question: All normal-form games have at least one dominant strategy. Indicate whether the statement is true ... (Read 66 times)

WhattoUnderstand · **on:** Jul 1, 2018

All normal-form games have at least one dominant strategy.

Indicate whether the statement is true or false

Question 2

How would each of the following affect the firm's marginal, average, and average variable cost curves?

a. An increase in wages
b. A decrease in material costs
c. The government imposes a fixed amount of tax.
d. The rent that the firm pays on the building that it leases decreases.

dreamfighter72 · **Reply #1 on:** Jul 1, 2018

Answer to Question 1

False. Dominant strategies only arise if a player has a single strategy that provides higher payoffs than any other strategy regardless of the other player's move.

Answer to Question 2

a. Wages are a variable cost, so MC, AVC, and ATC increase.
b. Materials are a variable cost, so MC, AVC, and ATC decrease.
c. A fixed or lump-sum tax increases ATC but not MC or AVC.
d. Rent is generally viewed as a fixed cost, so ATC decreases, but MC and AVC are unchanged.