Consider a "punishment" variation of the two-firm oligopoly situation shown in the figure below. Suppose that if one firm sets a low price while the other sets a high price, then the firm setting the high price can fine the firm setting the low price. Suppose that whenever a fine is imposed, X dollars are taken from the low-price firm and given to the high-price firm. RareAir's price strategy High Low $12 $15 A B High $12 $6 $6 $8 Low $15 $8 Instructions: Enter your answer as a whole number. What is the smallest amount that the fine X can be such that both firms will want to always set the high price? $O million Uptown's price strategy

Imagine that firm X chooses their quantity first, then firm Y observes the quantity of firm X and chooses their own quantity.  What is the subgame perfect Nash Equilibrium?  Is there a first or second-mover advantage here? You don't need to draw the whole game tree but you should give some kind of explanation for how you came to this equilibrium.  (You may assume that firm X can only choose quantities that are multiples of 200.  This prevents you from having to deal with prices that are not on the schedule and makes firm Y's strategy easier to write. )

Suppose that the central bank for this economy suddenly and unexpectedly decreases the money supply in an effort to reduce inflation. As a result of this unanticipated policy action, actual inflation falls to 3%. On the previous graph, use the black point (plus symbol labeled "B") to illustrate the short-run effects of this policy. Suppose that now, after a period of 3% inflation, households and firms begin to expect that the inflation rate will persist at the level of 3%. On the previous graph, use the purple line (diamond symbol) to draw SRPC₂, the short-run Phillips curve that is consistent with these expectations, assuming that it is parallel to SRPC₂- Finally, using the orange point (square symbol labeled "C"), indicate on the previous graph the new, long-run equilibrium for this economy. The inflation rate at point C is unemployment rate at point A. the inflation rate at point A, and the unemployment rate at point C is Was the central bank able to achieve its goal of lowering…

Please no written by hand and no image (Bertrand's duopoly game with discrete prices) Consider the variant of the example of Bertrand's duopoly game in this section in which each firm is restricted to choose a price that is an integral number of cents. Take the monetary unit to be a cent, and assume that c is an integer and a>c+!. Is (c,c) a nash equilibrium of this game? Is there any other nash equilibrium?

the question is in the image attached.

Consider two firms in the Australia market. The table below depicts each firm’s profits, depending on what price both firms charge.   a. Find (if any) each firm's dominant strategy. b. Which strategy does each firm choose in equilibrium when collusion (joint agreement) is not allowed? c. Suppose that collusion is allowed between the two firms. Could these firms benefit from collusion? Why or why not?

Part 2: First Long Question There are two French bakeries in a small town: Le Meilleur Croissant (C), owned by Camille, and Le Meilleur Pain Au Chocolat (P), owned by Paul. In each period of an infinitely repeated game, they compete a la Bertrand, with market demand given by Q(pmin) = 10 - Pmin- Even though they sell identical goods, they have different marginal costs: cc = 2 and %3D Cp = 4 (Paul bakes just as well but is bad at business decisions). There are no fixed costs. Question 6 Turns out that Camille and Paul are married, and so they choose prices to maximize the joint profits of the two firms. Because both love baking and love each other, they also jointly decide that both firms should be selling positive amounts in their optimal plan. What prices do they choose? Pc = 6, pp = 11 Pc = 6.5, pp = 6.5 Pc = 6, pp = 6 Pc = 7, pp = 7 %3D O pc = 6, pp = 7

Consider two Cournot oligopolists, firm 1 and firm 2, in a homogenous product market. The market demand is P = 100 – 3Q and each firm has a constant marginal cost MC=10. The Cournot equilibrium quantity for each firm is: a. 7.5 b. 10 c. 5 d.15

Duopoly: 1. Consider a duopoly game with 2 firms. The market inverse demand curve is given by P(Q) = 120-Q, where Q = 9₁ +9₂ and q; is the quantity produced by firm i. The firm's long run total costs are given by C₁(9₁)=2q₁ and C₂(92)=92, respectively. a. Determine the Nash Equilibrium for Cournot competition, in which firms compete based on quantity. What is each firm's best response as a function of the other firm's output? Graph these best response functions in on the same graph. Compute the associated payoffs for each firm. b. Determine the Nash Equilibrium for Bertrand competition, in which firms compete based on price and stand ready to meet market demand at that price. What is each firm's best response as a function of the other firm's price? Graph these best response functions in on the same graph. Compute the associated payoffs for each firm. Game Th

Space 1 options: less than or equal to, equal to, greater than or equal to   Space 2 options: 0 0.5 1 8 16