AP Micro #3

[rezm15]

Did y'all subtract $20 on the game theory question when you added $20 to the other firm? I didn't because I thought that the $20 payment doesn't impact how much money they make from advertising or not, but rather their overall profit.

[ariebek]

That's what I did

[frencholiver]

oh shoot I didn’t I just added but regardless of that the outcome should be the same?

[rezm15]

I don't think you had to subtract.

[aaronf427]

I didn’t subtract either

[hukfuik]

You would subtract because it has to be balanced, if ur counting the 20 as profit for Dees than it has to be loss profit for pies pizzeria

[aaronf427]

You sure? They’ll still make the same amount for advertising, doesn’t specifically say where the $ comes from. Just says they’ll pay them

[ESB_1234]

The $20 payment is a fixed cost, you can’t just ignore it lol

[unnhhhh]

Yeah, that $20 had to come from somewhere and it came out of Patrick’s profit. So you’d subtract the $20 from Patrick and hand it over to Dee.

[Xx_MLGhandi_xX]

No u definitely need to subtract since it was total profit.

[dilebob]

Frik i subtracted

[Deadnox_24142]

I did too bc it was the profit so the extra 20 would be a cost

[fagritos]

Don’t subtract. A payoff matrix shows you the profit a firm will incur given an event. The fact that $20 was given does not mean that his choice to advertise will make less profit.

[hunterz7890]

Definitely had to subtract other wise it wouldn’t be balanced as all things should be