Microeconomics
21st Edition
ISBN: 9781259915727
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
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Question
Chapter 14, Problem 10DQ
To determine
The outcome of a sequential game with no collusion.
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Students have asked these similar questions
QUESTION 8
Player 1 chooses between Up and Down. Player 2 observes this, then chooses between Up and Down herself. If both players choose the same action, they both get a payoff of 1. If they choose
different actions, the player with Up gets 1 and the player with Down gets -1. How many (pure strategy) Nash equilibria are there in this game?
O 3
O 4
QUESTION 9
In the Bertrand model, suppose that each firm has a marginal cost of £10 and that firm 1 sets a price of £9.99, which of the following a best-response for firm 2? Click all the correct answers.
O £9.99
O £10.01
O £11.01
O £10.00
O £9.98
QUESTION 10
In the Lindahl model, if player 1 is honest and player 2 maximises his utility which of the following is true:
O Player 2 has a higher utility than if both players had been honest.
O The level of public good provided is more than that implied by the Samuelson rule.
O Player 1 consumes more public goods than player 2.
18. Answer the next question based on the payoff matrix for a two-firm oligopoly where the
numbers represent the firms' respective profits given each of their pricing strategies:
FIRM Y
O $ 800,000
O $1,000,000
O $1,450,000
Strategies:
High-price
If both firms collude to maximize joint profits,
O $1,250,000
FIRM X
High-price
X = $625,000
Y = $625,000
Low-price X = $275,000
Y = $725,000
Low Price
X = $725,000
Y = $275,000
X = $400,000
Y = $400,000
tal profits for the two firms will be:
Suppose that Firm A and Firm B are independently deciding whether to sell at a low price or a high price. The payoff matrix below
shows the profits per year for each company resulting from the two price options.
Firm B High Price
Firm B Low Price
$5 million
$2 million
$3 million
$1 million
$4 million
$5 million
$2 million
$3 million
a. Does Firm A have a dominant strategy?
O The dominant strategy for Firm A is a low price.
O No, there is no dominant strategy for Firm A.
O The dominant strategy for Firm A is a high price.
b. Does Firm B have a dominant strategy?
O The dominant strategy for Firm B is a low price.
O The dominant strategy for Firm B is a high price.
O No, there is no dominant strategy for Firm B.
Firm A Low Price Firm A High Price
Chapter 14 Solutions
Microeconomics
Ch. 14.2 - Prob. 1QQCh. 14.2 - The D2e segment of the demand curve D2eD1 in graph...Ch. 14.2 - Prob. 3QQCh. 14.2 - Prob. 4QQCh. 14 - Prob. 1DQCh. 14 - Prob. 2DQCh. 14 - Prob. 3DQCh. 14 - Prob. 4DQCh. 14 - Prob. 5DQCh. 14 - Prob. 6DQ
Ch. 14 - Prob. 7DQCh. 14 - Prob. 8DQCh. 14 - Prob. 9DQCh. 14 - Prob. 10DQCh. 14 - Prob. 11DQCh. 14 - Prob. 12DQCh. 14 - Prob. 13DQCh. 14 - Prob. 14DQCh. 14 - Prob. 1RQCh. 14 - Prob. 2RQCh. 14 - Prob. 3RQCh. 14 - Prob. 4RQCh. 14 - Prob. 5RQCh. 14 - Prob. 6RQCh. 14 - Prob. 7RQCh. 14 - Prob. 8RQCh. 14 - Prob. 9RQCh. 14 - Prob. 10RQCh. 14 - Prob. 1PCh. 14 - Prob. 2PCh. 14 - Prob. 3P
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