In this question we will consider the effect of collusion between bidders in a secondprice, sealed-bid auction. there is one seller who will sell one object using a secondprice sealed-bid auction. the bidders have independent, private values drawn from a distribution on [0, 1]. if a bidder with value v gets the object at price p, his payoff is v−p; if a bidder does not get the object his payoff is 0. we will consider the possibility of collusion between two bidders who know each others’ value for the object. suppose that the objective of these two colluding bidders is to choose their two bids as to maximize the sum of their payoffs. the bidders can submit any bids they like as long as the bids are in [0, 1].(a) let’s first consider the case in which there are only two bidders. what two bids should they submit? explain.(b) now suppose that there is a third bidder who is not part of the collusion. does the existence of this bidder change the optimal bids for the two bidders who are colluding? explain.

5. profit maximization and shutting down in the short run suppose that the market for polos is a competitive market. the following graph shows the daily cost curves of a firm operating in this market. 0 2 4 6 8 10 12 14 16 18 20 50 45 40 35 30 25 20 15 10 5 0 price (dollars per polo) quantity (thousands of polos) mc atc avc for each price in the following table, calculate the firm's optimal quantity of units to produce, and determine the profit or loss if it produces at that quantity, using the data from the previous graph to identify its total variable cost. assume that if the firm is indifferent between producing and shutting down, it will produce. (hint: you can select the purple points [diamond symbols] on the previous graph to see precise information on average variable cost.) price quantity total revenue fixed cost variable cost profit (dollars per polo) (polos) (dollars) (dollars) (dollars) (dollars) 12.50 135,000 27.50 135,000 45.00 135,000 if the firm shuts down, it must incur its fixed costs (fc) in the short run. in this case, the firm's fixed cost is $135,000 per day. in other words, if it shuts down, the firm would suffer losses of $135,000 per day until its fixed costs end (such as the expiration of a building lease). this firm's shutdown price—that is, the price below which it is optimal for the firm to shut down—is per polo.

Stella company sells only two products, product a and product b. product a product b total selling price $50 $30 variable cost per unit $20 $10 total fixed costs $2,110,000 stella sells two units of product a for each unit it sells of product b. stella faces a tax rate of 40%. stella desires a net afterminustax income of $54,000. the breakeven point in units would be

According to ceo heidi ganahl, camp bow wow requires a strong and consistent corporate culture to keep all local franchise owners "on the same page" and to follow a common template for the business and brand. this culture could become detrimental over time because: (a) strong consistent cultures are inflexible and incapable of adapting to environmental change (b) strong consistent cultures are too flexible and capable of adapting to environmental change (c) strong consistent cultures don’t perform well in any environment (d) the passing of time provides stability and predictability for businesses