Two firms compete in price in a market for infinite periods. In this market, there are N consumers; each buys one unit per period if the price does not exceed $10 and nothing otherwise. Consumers buy from the firm selling at a lower price. In case both firms charge the same price, assume N/2 consumers buy from each firm. Assume zero production cost for both firms. A possible strategy that may support the collusive equilibrium is: Announce a price of $10 if the equilibrium price has always been $10; otherwise, announce the price as in Nash equilibrium of the one-shot Bertrand game. 1 a Let & be the discount factor Find the condition on & such that
Q: ed to one decimal place.)
A: Cost of a market basket of goods in 2016 = $1950 Cost of a market basket of goods in 2018 = $2085 20...
Q: 3. As supervisor of a facilities engineering department, you consider mobile cranes to be critical e...
A: Given information Project A Initial capital=$272000 Annual cost=28800 Salvage value=25000 N= 6 years...
Q: Suppose Canada has a voluntary export restraint for lumber going to the U.S. Who captures the quota ...
A: Voluntary export restraints are game plans among exporting and bringing in nations in which the expo...
Q: 7. Suppose that over the last ten years, the economic productivity has been growing faster in Atlant...
A: Here, it is given that the economy of Atlantis grows faster than Latveria over the last year with eq...
Q: Suppose a small country initially imports 100 units of a good. Then it imposes a tariff of $5 that r...
A: A net welfare gain refers to the impact of a government policy, or a decision by firms, on total eco...
Q: Discuss the global and local problems in the economy on why there us a lot of working students
A: An economy is defined as all activity in a given region that is connected to the production and cons...
Q: The quantity of real GDP supplied decreases if the price level because it profits. .... O A. rises; ...
A: Real GDP is defined as the price of base year multiplied by the quantity of current year. Hence if t...
Q: Assume that the demand curve is a straight line. If the price per unit of a good rises from $2.40 to...
A: P1 = $2.40 P2=$3.00 Q1 = 250,000 Q2 =200,000 Point Price Elasticity: ep = ∆Q∆P x ...
Q: In 1924, Kleenex tissue was invented as a means to remove cold cream. The product was initially back...
A: In a market, if there are no competing firms, the firm selling a standalone product or service is co...
Q: We have data on 2323 randomly selected households consisting of three persons in 2013. Let ENTERT de...
A: R-squared is used as measure of goodness of fit, a formula to calculate R-squared: R2=ESSTSS Where E...
Q: A firm currently faces a market price of $7. If producing output where MC= $7, it would produce 11 u...
A: Actually in simple words we can say that the market price in the economy is generally known as the c...
Q: Example is given: A petrol pump is supplied with petrol once a day. If its daily volume of sales (X)...
A:
Q: “To be or not to be, that is the question.” Imagine that in answering this question Hamlet had the f...
A: Given information 2 players Hamlet and king Hamlet has 2 strategy to be or not to be King has 2 str...
Q: The relationship showing that damage to the environment increases as a country's per capita income r...
A: The measure of the amount of money that is being earned per person in a geographic region or nation ...
Q: Consider the Cobb-Douglas utility function of a consumer is given as u (z y) := 1"y where a > b and ...
A: Given; Utility function; u(x,y)=xaybwhere;a>b and the sum (a, b) and the product (a,b) are 1 and...
Q: 2-1 On a loan for $25,000 to purchase a new car, what are the monthly payments at an annual interest...
A: Loan amount = $25,000 Interest rate = 6% for 4 years We need to calculate the Monthly payments
Q: Problem 2: Show your work. Five salesmen of B, C, D and E of a company are considered for a three me...
A:
Q: Frank Baum wrote the Wizard of Oz in favor of O eliminating gold as a commodity that backed money to...
A: The Wizard of Oz includes interpretations of L. Frank Baum's contemporary fairy tale (originally pub...
Q: b. Discretionary spending accounts for approximately of the federal budget, whereas mandatory two-th...
A: Discretionary spending refers to the government expenditure that is not pre-planned by the governmen...
Q: An existing robot can be kept if $2,000 is spent now to upgrade it for future service requirements. ...
A: Introduction Annual worth has calculated to check when we are using a particular machine then every ...
Q: Show your work. An MBA applies for a job in two firms X and Y. The probability of his being selected...
A:
Q: Explain why the positive growth rate of RGDP, which is already adjusted for inflation, doesn’t neces...
A: The GDP is a metric that reflects both the economy's total income and total expenditure on goods and...
Q: 1. A municipal police department has decided to acquire an unnamed drone for aerial surveillance of ...
A: The correct answer is given in the second step.
Q: Commodity 2001 price 2002 price Rice Cherries Market Basket Quantity 10 lbs. 5 Ibs. $1.00 $1.75 $1.1...
A: A consumer price index is calculated as a set of summary measures of the proportional change in the ...
Q: Today your oil futures price is $49.35 per barrel. Today’s Spot price is $49.95. In 5 months time wh...
A: Given that; Today Futures price of oil is $49.35 per barrel Current Spot price is $49.95 In 5 month...
Q: Production Point Capital (K) Labor (L) Output (Q) A 1 1 2 B 2 2 C 1 3 D 2 4 E 1 5 F 2 6 G...
A: Given information Production table is given Production Point Capital (K) Labor (L) Output (Q) ...
Q: Use the following statements to answer this question: I. Higher government deficits increase the sup...
A: I. higher government deficits means that the government spending is greater than the government reve...
Q: Bozo is a clown. He wants to start a clowning business where he sends other clowns out to birthday p...
A: When there are 2 workers,Output (Birthday parties)=7When there are 3 workers,Output (Birthday partie...
Q: If organic virgin coconut oil (VCO) has been proven to enhance your immune system against corona vir...
A: Answer: Note: you have not mentioned but it seems true/false and I am answering this question as tru...
Q: of a given activity. c) Economists refer to the revenue collected as a result of a tax as the burden...
A: In an economy, economists think that there are different types of tax burden when government imposes...
Q: Refer to the figure below. +16 +12 +8 Consumption Investment is more volatile than consumption. Inve...
A: Introduction In the above diagram consumption and investment spending has given from 2000 - 08. a) c...
Q: ISR (intelligence, Surveillance & Reconnaissance) is performed by fixed-wing aircraft (still Auroran...
A:
Q: The economy of Eastlandia in 2021: • C = 260 + 0.5YD • P = 100 %3D • T= TR = G= NX = 0 The equilibri...
A: Actually in simple words we can say that the Real GDP is considered as an Nominal amount of the GDP ...
Q: Production, Costs, and Perfect Competition: Firm in the Short Period a. data: (1) K = 7 and the...
A: Disclaimer :- as you posted multipart questions we are supposed to solve the first 3 questions only ...
Q: Output Total Cost 8) $10 20 28 3. 38 4 53 73 6. 98 Refer to the provided table. The total fixed cost...
A:
Q: If the consumption function in an economy as follows C = 50 + 0.75Y and the following variables fixe...
A: Given that:- Consumption, C=50+0.75Y Investment, I=250 MD Government expenditure, G=200 MJD Net expo...
Q: To honor your instructor in ECON 310, you have decided at graduation to endow a professorship in eng...
A: The present value is the current value of the future sum of money. The formula for calculating the p...
Q: In planning for your retirement, you would like to withdraw $60,000 per year for 12 years. The first...
A: Amount to be withdrawn = $60,000 Time period = 12 years I = 10% per year
Q: Consider the model of public goods in the last section of this chapter. (a) Suppose that preference...
A: The correct answer is given in the second step.
Q: Saving function = S=- 500 + 0.25 Y, I = 400 - 1250 i Ms = 1200, Mt = 0.20 Y, Mp = 0.05 Y and Msp = 5...
A: The correct answer is given in the second step .
Q: f you pay $1000 for a $1000 bond that pays annual “coupon interest” equal to 5% and matures in 3 yea...
A: Given bond coupon rate = 5 % Bond face value = 1000 $ Current market value = 1000 $ Time = 3 years
Q: If $50,000 is deposited in a bank operating in a banking system that has a reserve requirement of 10...
A: Here, given information is: Deposited money: $50,000 Reserve requirements: 10% To find: total mone...
Q: a. Distinguish between legally required reserves and excess reserves. b. Why don’t banks hold a 1...
A: Disclaimer“Since you have asked multiple questions, we will solve the first three questions for you....
Q: A telecommunications business may produce 500, 000 units per month. The company generates a total mo...
A:
Q: Price (per Ounce) Demanded (Ounces per Show) A $0.50 B 0.45 2 C 0.40 4 0.35 6 E 0.30 9 0.25 12 G 0.2...
A: Price Elasticity of Demand measures the percentage change in quantity demanded due to percentage cha...
Q: Consider a monopoly with the following marginal cost and demand curves: MC=2Q+200,p=2,600−2Q d. Do ...
A: Monopoly is the single seller in the market, Monopoly price and quantity are determined when margina...
Q: At what output price would the farmer be indifferent in producing the 500 units of output given that...
A: Given; Output units= 500 units Fixed cost of producing output Y= P150,000 Variable Cost= P300 per un...
Q: Suppose a firm produces the following products. Calculate and fil in the missing values in the table...
A: PLEASE FIND THE ANSWER BELOW.
Q: It is clear that productive inefficiency is a waste since resources are being used in a way that pro...
A: Productive inefficiency means that the same output can be produced at a lower cost of production. It...
Q: How does the new concept of global relations emerges from the experiences of Latin-American countrie...
A: Latin America is the part of the Americas made up of nations and areas where Romance languages (lang...
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 3 images
- 1. Two firms compete in price in a market for infinite periods. In this market, there are N consumers; each buys one unit per period if the price does not exceed $10 and nothing otherwise. Consumers buy from the firm selling at a lower price. In case both firms charge the same price, assume N/2 consumers buy from each firm. Assume zero production cost for both firms. A possible strategy that may support the collusive equilibrium is: Announce a price of $10 if the equilibrium price has always been $10; otherwise, announce the price as in Nash equilibrium of the one-shot Bertrand game. 1.a Let 6 be the discount factor. Find the condition on 6 such that the above strategy can indeed support the collusive equilibrium. Now suppose that Firm 2's marginal cost is $4, but Firm 1's marginal cost remains at zero. 1.b Find the condition on & under which Firm 2 will not deviate from the collusive equilibrium.Suppose OPEC has only two producers, Saudi Arabia and Nigeria, Saudi Arabia has far more oil reserves and is the lower-cost producer compared to Nigeria. The payoff matrix in the table to the right shows the profits earned per day by each country. "Low output" corresponds to producing the OPEC assigned quota and "high output" corresponds to producing the maximum capacity beyond the assigned quota Which of the following statements is true? OA. The Nash equilibrium is a cooperative equilibrium. OB. The Nash equilibrium is a noncooperative, dominant strategy equilibrium OC. The Nash equilibrium is a collusive equilibrium. D. There is no Nash equilibrium in this game because each party. pursues its dominant strategy. Low output Nigeria High output Low output Nigeria earns $20 million Saudi Arabia Nigeria earns $30 million Saudi Arabia earns $100 million Saudi Arabia earns $80 million High output Nigeria earns $12 million Saudi Arabia earns $75 million Nigeria earns $20 million Saudi Arabia…1. Two firms compete in price in a market for infinite periods. In this market, there are N consumers; each buys one unit per period if the price does not exceed $10 and nothing otherwise. Consumers buy from the firm selling at a lower price. In case both firms charge the same price, assume N/2 consumers buy from each firm. Assume zero production cost for both firms. A possible strategy that may support the collusive equilibrium is: Announce a price of $10 if the equilibrium price has always been $10; otherwise, announce the price as in Nash equilibrium of the one-shot Bertrand game.
- Two firms produce identical products at zero cost, and theycompete by setting prices. If each firm charges a low price,then both firms earn profits of zero. If each firm charges ahigh price, then each firm earns profits of £30. If one firmcharges a high price and the other firm charges a low price,the firm that charges the lower price earns profits of £50, andthe firm charging the higher price earns profits of zero. (a) Which oligopoly model best describes this situation?(b) Write this game in normal form.(c) Suppose the game is infinitely repeated. Can theplayers sustain the "collusive outcome" as a Nashequilibrium if the interest rate is 50 percent? Explain. Please answer the a, b and c parts.Two firms produce the samecommodity, both with zero cost. The demand for this commodity is D(P) = 100−P.The two firms can each produce at most 50 units. They compete on price andrationing is efficient: if pi < pj then the demand that j faces is Dj(p) = D(pj) − qi,where qi is the quantity supplied by firm i. That is, the lower price firm gets to sellfirst. Is the price list p = (p1, p2) = (0, 0) a Nash equilibrium? Prove your assertion.2. An industry contains two firms that have identical cost functions C(q)=10+2q. The inverse demand function for the market is P=50-2Q where Q is the total industry output. Assuming the firms compete in quantities: Find the firms' best response functions. b. Solve for the Cournot Nash Equilibrium of the game. What is the total industry output in equilibrium? What is the equilibrium price? с. i. If both firms could collude, what would the industry output and price be? Suppose they decide that each firm produces half of the industry output found in part (i). Is this agreement self-enforcing? Explain. ii. a.
- Suppose that there are two firms producing a homogenous product and let the market demand besiven by Q(P) = 120 -P/2 . For simplicity assume that each fir operates with zero total cost. a) Assuming that firms compete over quantities, find the price best-response functions of firms 1 and2. Draw a diagram that shows the BRFs and the equilibrium, Are outputs strategic substitutes orcomplements? Find each firm's Cournot equilibrium output, price, profit, and total surplus. DefineNash equilibrium and argue that it is indeed a Nash equilibrium. b) Show that the duopolists have incentives to collude, Find their joint profit-maximizing price, output,and profit: find each firm's output and profit. Is collusion a Nash equilibrium? If not, what is theoptimal defection for each firm? Show this game in a 2X2 matrix form. What does this imply aboutthe Nash equilibrium or the stability of their collusive agreement? Is it a Prisoner's Dilemma Type? c) Suppose now that fims play the above game in…The marginal cost of a product is fixed at MC = 20. The demand for the product is Q = 100 - 2P. (a) Now consider a Cournot model with two firms that are choosing quantities simultaneously. What is the best reply (best response) function for each firm? What is theNash equilibrium? What is the total surplus? (b)What do you expect the total surplus would be with three firms? Why? (You do not need to calculate an exact value. You can say ”total surplus is at least 100”, or ”total surplus is at most 80”)I need solution for only 1.d. Thanks a lot. Solution for 1d please. Two firms compete in price in a market for infinite periods. In this market, there are N consumers; each buys one unit per period if the price does not exceed $10 and nothing otherwise. Consumers buy from the firm selling at a lower price. In case both firms charge the same price, assume N/2 consumers buy from each firm. Assume zero production cost for both firms. A possible strategy that may support the collusive equilibrium is: Announce a price of $10 if the equilibrium price has always been $10; otherwise, announce the price as in Nash equilibrium of the one-shot Bertrand game. 1.a Let δ be the discount factor. Find the condition on δ such that the above strategy can indeed support the collusive equilibrium. Now suppose that Firm 2’s marginal cost is $4, but Firm 1’s marginal cost remains at zero. 1.b Find the condition on δ under which Firm 2 will not deviate from the collusive equilibrium. 1.c Find the…
- Problem 3. Consider the following game with three firms. First, firms 1 and 2 si- multancously choose quantities q1 and q2 respectively. After observing firm 1 and 2's quantities, firm 3 chooses its quantity q3. There is no production cost and the inverse demand function is p= 12 – (91 +2 + 93). (a) Compute the SPNE of this game. (b) Give an example of Nash equilibrium s* with s = 4 and s, = 6 , that is not subgame perfect. game theory questionSuppose that Market demand for golf balls is described by Q= 90-3p,Where Q is measured in kilos of balls. There are two firms that supply the market. Firm 1 can produce a kilo of balls at a constant unit cost of $15 whereas firm 2 has a constant unit cost equal to $10.a. suppose firms compete in quantities. How much does each firm sell in a Cournot equilibrium? What is the market price and what are firms' profit?b. suppose firms compete in price. How much does each firm sell in a Bertrand equilibrium. What is market price and what are firms' profits?Let ci be the constant marginal and average cost for firm i (so that firms may have different marginal costs). Suppose demand is given by P=1-Q. Calculate the Nash equilibrium quantities assuming there are two firms in a Cournot market. Also compute market output, market price, firm profits, industry prof- its, consumer surplus, and total welfare. Represent the Nash equilibrium on a best-response function diagram. Show how a reduction in firm 1’s cost would change the equilibrium. Draw a representative isoprofit for firm 1.