Question

In: Economics

Two equal-sized newspapers have an overlap circulation of 10% (10% of the subscribers subscribe to both...

Two equal-sized newspapers have an overlap circulation of 10% (10% of the subscribers subscribe to both newspapers). Advertisers are willing to pay $15 to advertise in one newspaper but only $29 to advertise in both, because they're unwilling to pay twice to reach the same subscriber. Suppose the advertisers bargain by telling each newspaper that they're going to reach agreement with the other newspaper, whereby they pay the other newspaper $14 to advertise.

According to the nonstrategic view of bargaining, each newspaper would earnof the $14 in value added by reaching an agreement with the advertisers. The total gain for the two newspapers from reaching an agreement is.

Suppose the two newspapers merge. As such, the advertisers can no longer bargain by telling each newspaper that they're going to reach agreement with the other newspaper. Thus, the total gains for the two parties (the advertisers and the merged newspapers) from reaching an agreement with the advertisers are $14.

According to the nonstrategic view of bargaining, each merged newspaper will earnin an agreement with the advertisers. This gain to the merged newspaper is than the total gains to the individual newspapers pre-meger.

Solutions

Expert Solution


Related Solutions

Chimnesia has two equal-sized groups of people: smokers and nonsmokers. Both types of people have utility...
Chimnesia has two equal-sized groups of people: smokers and nonsmokers. Both types of people have utility U = Ï W C, where C is the amount of consumption that people have in any period. So long as they are healthy, individuals will consume their entire income of $16,000. If they need medical attention (and have no insurance), they will have to spend $12,000 to get healthy again, leaving them with only $4,000 to consume. Smokers have a 10% chance of...
you have the choice of two investments of equal risk. The required return for both is...
you have the choice of two investments of equal risk. The required return for both is 8%. The first pays 1500 per month for 30 years and starts in 2 years. The second pays 15000 per year in perpetuity, but starts in 3 years. If the cost of both the investments is the same, which one would you prefer and why?
Chimnesia has two equally sized groups of people: smokers and nonsmokers. Both types of people have...
Chimnesia has two equally sized groups of people: smokers and nonsmokers. Both types of people have utility U =sqrt(C), where C is the amount of consumption that people have in any period. So long as they are healthy, individuals will consume their entire income of $16,000. If they need medical attention (and have no insurance), they will have to spend $12,000 to get healthy again, leaving them with only $4,000 to consume. Smokers have a 10% chance of requiring major...
Background Information: A large population of squirrels is split into two equal sized subpopulations (A and...
Background Information: A large population of squirrels is split into two equal sized subpopulations (A and B) by the formation of a deep, rushing river that goes between them. This prevents gene flow since the squirrels can neither swim nor fly. A powerful magician living near population A loves these squirrels and the traits they exhibit very much, and performs a spell that prevents any mutations from occurring in that group. This magician is practically immortal, so the spell continues...
The quick sort algorithm always divides the list into two equal sized sublists, then sorts each...
The quick sort algorithm always divides the list into two equal sized sublists, then sorts each sublists, and then combines both sublists.. True of False
QUESTION 9 Compare the following two ecosystems, both of which have EQUAL rates of primary production....
QUESTION 9 Compare the following two ecosystems, both of which have EQUAL rates of primary production. The dominant primary producers in a grassland ecosystem are vascular plants (grasses). The dominant herbivores in the grassland are vertebrate endotherms (deer and rabbits). The dominant primary producers in open ocean ecosystems are microscopic algae, and the dominant herbivores are invertebrate zooplankton (ectotherms). Based on this information alone, which of the following statements is most likely to be true? Group of answer choices a.)The...
63 % of U.S. adults have very little confidence in newspapers. You randomly select 10 U.S....
63 % of U.S. adults have very little confidence in newspapers. You randomly select 10 U.S. adults. Find the probability that the number of U.S. adults who have very little confidence in newspapers is (a) exactly five, (b) at least six, and (c) less than four. (a) P(5)=____ (Round to three decimal places as needed.) (b) P(x greater than or equals 6)=_____ (Round to three decimal places as needed.) (c) P(x< 4)=___ (Round to three decimal places as needed.)
​ 62% of U.S. adults have very little confidence in newspapers. You randomly select 10 U.S....
​ 62% of U.S. adults have very little confidence in newspapers. You randomly select 10 U.S. adults. Find the probability that the number of U.S. adults who have very little confidence in newspapers is ​ (a) exactly​ five, (b) at least​ six, and​ (c) less than four.
b) Banks are required to have specie equal to 10% of the currency they have in...
b) Banks are required to have specie equal to 10% of the currency they have in circulation, Assume banks hold no excess reserves. Banks have $1000 in specie. What is the volume of bank notes in circulation? Are notes full bodied or partial backed? d) True or false and explain: If bank's expectations cause them to reduce lending there will be an unanticipated increase in the money supply. e) Suppose banks have a 10% reserve requirement and hold no excess...
Here are data on two stocks, both of which have discount rates of 10%: Stock A...
Here are data on two stocks, both of which have discount rates of 10%: Stock A Stock B Return on equity 10 % 8 % Earnings per share $ 1.20 $ 1.50 Dividends per share $ 0.60 $ 0.60 a. What are the dividend payout ratios for each firm? (Enter your answers as a percent rounded to 2 decimal places.) b. What are the expected dividend growth rates for each stock? (Do not round intermediate calculations. Enter your answers as...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT