Refer to the table below to answer the following questions. Table 14.2.10 Fim A Comply A $im Cheat A $1.5m B-505m Comply B SIm Firm B A-505m Cheat B $1.5m A0 B:0 Refer to Table 14.2.10. Firm A and Firm B are the only producers of soap powder. They collude and agree to share the market equally. The equilibrium a dominant strategy equilibrium because the strategy in this game is for a firm Select one O A is to comply regardless of the other firm's choice O B. is to comply when the other firm cheats and to cheat when the other firm complies O Cis not to comply when the other firm complies and to cheat when the other firm cheats OD. is to cheat regardless of the other firm's choice OEs not to comply when the other firm cheats and to cheat when the other firm complies

Refer to the table below to answer the following questions. Table 14.2.10 Fim A Comply A $im Cheat A $1.5m B-505m Comply B SIm Firm B A-505m Cheat B $1.5m A0 B:0 Refer to Table 14.2.10. Firm A and Firm B are the only producers of soap powder. They collude and agree to share the market equally. The equilibrium a dominant strategy equilibrium because the strategy in this game is for a firm Select one O A is to comply regardless of the other firm's choice O B. is to comply when the other firm cheats and to cheat when the other firm complies O Cis not to comply when the other firm complies and to cheat when the other firm cheats OD. is to cheat regardless of the other firm's choice OEs not to comply when the other firm cheats and to cheat when the other firm complies

Principles of Microeconomics (MindTap Course List)

8th Edition

ISBN:9781305971493

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter17: Oligopoly

Section: Chapter Questions

Problem 5PA

See similar textbooks

Similar questions

Some years ago. two intercity bus companies, Greyhound Lines, Inc. and Trailways Transportation System, wanted to merge. One possible definition of the market for this case was the market for intercity bus service. Another possible definition was the market for intercity transportation, including personal cars, car rentals, passenger trains, and commuter air flights.' Which definition do you think the bus companies preferred, and why?
Assume that the competition between Boeing and Airbus can be characterized by the following mnatrix Aórbus Produce Qut] Produce -15/ – 5 90/0 Boeing Quit 0/140 0/0 where the first number in each cell denotes the payoff that Boeing receives and the second nunber is the payoff that Airbus receives. Assume that Boeing has a first mover advantage. Then a subsidy of 10 provided to Airbus by the European government will change nothing will increase European welfare will negatively affect European welfare result in both firms leaving the market
fnan421 Word Gözden Geçir Görünüm Varam V Ne yapmak isted ginzi soyieyin 2) Two firms, X and Y, are planning to market their new products. Each firm can develop TV, Laptop. Market research indicates that the resulting profits to each firm for the alternative strategies are given by the following payoff matrix: FIRM Y TV LAPTOP PHONE FIRM X TV 30, 30 50, 35 20, 50 LAPTOP 40,70 20, 20 50,80 PHONE 50,20 80,50 10,10 A) Find the Nash equilibria for this game, assuming that both firms make their decisions at the same time. (explain the decision step by step)i B) If each firm is risk averse and uses a maximin strategy, what will be the resulting equilibrium? (explain the decision step by step);
Kate and Alice are small-town ready-mix concrete duopolints. The market demand tunction is o- 20,000 - 200Pwhere Pis the price of a cubic yard of concrete and Ois the number of cubic yards demanded per year. Marginal cost is sa0 per cubic yard. Suppose Kate onters the market first and chooses her output belore Alice. What is the difference in Alice's profit when Kata enters the market tirst, compared to when they simultanecusly select ther outputa? When Kate entors the markat first, Alice's profit is $3,888.a0 lower. O When Kate enters the market fest, Alice's profit is 513,333.33 lower. O When Kate enters the market first, Alice's profit is $5,000 lower. O When Kate onters the market first, Alice's proft is $1.111.11 higher,
enter roctor "se urce n When negative externalities are present in a market 3 O private costs will be greater than social costs. O social costs will be greater than private costs. O only government regulation will solve the problem. O the market will not be able to reach any equilibrium. Question 3 In a monopolistically competitive industry, firms set price O equal to marginal cost since each firm is a price taker. O below marginal cost since each firm is a price taker. O above marginal cost since each firm is a price setter. O always a fraction of marginal cost since each firm is a price setter. C $ O 4 % BABAA 5 M Oll 6 & O 7 8 O 9 2 pts ✓ 0
Table 2 Imagine a small town in which only two residents, Lisa and Mark, own wells th Time left 1:57 drinking water. Each week Lisa and Mark work together to decide how many gallons of water to pump. They bring the water to town and sell it at whatever price the market will bear. To keep things simple, suppose that Lisa and Mark can pump as much water as they want without cost so that the marginal cost of water equals zero. The weekly town demand schedule and total revenue schedule for water is shown in the table below: Quantity (in gallons) 0 100 200 300 400 500 600 700 800 900 1,000 1,100 1,200 Price Select one: O a. 0 O b. 1,200 O c. 600 O d. 900 $120 110 100 90 80 70 60 50 40 30 20 10 0 Total Revenue (and Total Profit) $0 11,000 20,000 27,000 32,000 35,000 36,000 35,000 32,000 27,000 20,000 11,000 0 Refer to Table 2. If the market for water were perfectly competitive instead of monopolistic, how many gallo of water would be produced and sold?
Firms J and K produce compact-disc players and compete againstone another. Each firm can develop either an economy player (E)or a deluxe player (D). According to the best available marketresearch, the firms’ resulting profits are given by the accompanyingpayoff table.a. The firms make their decision independently, and each is seeking itsown maximum profit. Is it possible to make a confident predictionconcerning their actions and the outcome? Explain.Firm KE DE 30, 55 50, 60 Firm JD 40, 75 25, 50b. Suppose that firm J has a lead in development and so can move first.What action should J take, and what will be K’s response?c. What will be the outcome if firm K can move first?
. When Chinese automakers began exporting cars, rather thanfocusing on developed nations in the West, they shippedautos to emerging markets in countries such as Algeria, Russia,Chile, and South Africa. In these markets, even used vehiclesfrom multinational manufacturers are relatively scarce—andrelatively expensive. The Chinese automakers, who prioritizelow cost rather than design or even safety, applied a penetration-pricing strategy. A woman in Santiago, Chile, who boughta new Chery S21 explained, “The price factor is fairly decisive.I paid $5,500 new and full. Toyota with similar features costsaround $12,000.” Why do you think Chinese automakerschose that pricing strategy? Do you think it was successful?As Chinese regulators pressure these manufacturers to maketheir cars safer, do you think they will be able to keep theirprices low compared with those of the international automakers? Why or why not?26
Table 2 Imagine a small town in which only two residents, Lisa and Mark, own wells that produce sa drinking water. Each week Lisa and Mark work together to decide how many gallons of water to pump. They bring the water to town and sell it at whatever price the Time left 1:5 bear. To keep things simple, suppose that Lisa and Mark can pump as much water as they want without cost so that the marginal cost of water equals zero. The weekly town demand schedule and total revenue schedule for water is shown in the table below: Quantity (in gallons) 0 100 200 300 400 500 600 700 800 900 1,000 1,100 1,200 Select one: Price O a. $60 O b. $20 O c. $40 O d. $70 $120 110 100 90 80 70 60 50 40 30 20 10 0 Refer to Table 2. If Lisa and Mark operate as a profit-maximizing monopoly in the market for water, what price will they charge? Total Revenue (and Total Profit) $0 11,000 20,000 27,000 32,000 35,000 36,000 35,000 32,000 27,000 20,000 11,000 0
fnan421 - Word Teri Gozden Geçir Görünum Yardım Ne yapmak istediğinizi soyleyin 2) Two firms, X and Y, are planning to market their new products. Each firm can develop TV, Laptop. Market research indicates that the resulting profits to each firm for the alternative strategies are given by the following payoff matrixi FIRM Y TV LAPTOP PHONE FIRM X TV 30, 30 50, 35 20, 50 LAPTOP 40,70 20, 20 50,80 PHONE 50,20 80,50 10,10 A) What will be the equilibrium if Firm X makes its selection first? If Firm Y goes first? ; (Ctrl) -
Sometimes oligopolies in the same industry are very different in size. Suppose we have a duopoly where one firm (Film A) is large and the other film (Film B) is small, as the prisoners dilemma box in Table 10.4 shows. Assuming that both films know the payoffs, what is the likely outcome in this case?
May and Raj me the only two growers who provide organically grown corn to a local grocery store. They know that if they cooperated and produced less corn, they could raise the price of the com. If they work independently, they will each earn 100. If they decide to work together and both lower their output, they call each earn 150. If one person lowers output and the other does not, the person who lowers output will earn $1 and the other person will capture the entire market and will earn 200. Table 10.6 represents the choices available to Mary and Raj. What is the best choice for Raj if he is sole that Mary will cooperate? If Mary thinks Raj will cheat, what should Mary do and why? What is the prisoners dilemma result? What is the preferred choice if they could ensure cooperation? A = Work independently; B = Cooperate and Lower Output. (Each results entry lists Rajs earnings first, and Marys earnings second.)