Microeconomics (13th Edition)
13th Edition
ISBN: 9780134744476
Author: Michael Parkin
Publisher: PEARSON
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Chapter 15, Problem 13APA
To determine
Identify the benefits from each action led by the Microsoft and Mozilla.
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Anna, Bill, and Charles are competitors in a local market, and each is trying to decide whether it is worthwhile to advertise, If all of
them advertise, each will earn a profit of $5000. If none of them advertise, each will earn a profit of $8000, If only one of them
advertises, the one who advertises will earn a profit of $10,000 and the other two will each earn $2000. If two of them advertise,
those two will each earn a profit of $6000 and the other one will earn $1000. If all three follow their dominant strategy, what will
Anna do, and how much will she earn?
Select one:
a. Anna will advertise and earn $5000.
b. Anna will advertise and earn $6000.
C. Anna will not advertise and will earn $8000,
d. Anna will advertise and earn $10,000.
Suppose there are only two automobile companies,Ford and Chevrolet. Ford believes that Chevrolet will match any price it sets, but Chevrolet too is interested in maximizing profit. Use the following price and profit data to answer the following questions. a. What price will Ford charge?b. What price will Chevrolet charge once Ford has set its price?c. What is Ford’s profit after Chevrolet’s response?d. If the two firms collaborated to maximize joint profits, whatprices would they set?e. Given your answer to part (d), how could undetected cheatingon price cause the cheating firm’s profit to rise?
Imagine a small town in a remote area where only two residents, Maria and Miguel, own dairies that produce milk that is safe to drink. Each week Maria and Miguel work together to decide how many
gallons of milk to produce. They bring milk to town and sell it at whatever price the market will bear. To keep things simple, suppose that Maria and Miguel can produce as much milk as they want
without cost so that the marginal cost is zero. The weekly town demand schedule and total revenue schedule for milk is shown in the table below:
Quantity
(in gallons)
10
|1
O b. $12
O c. $10
d. S8
2
113
14
לן
16
17
18
19
10
11
12
Price
$24
$22
$20
$18
$16
$14
$12
$10
$8
$6
$4
$2
$0
Total Revenue
(and Total Profit)
$0
$22
$40
$54
$64
$70
$72
$70
$64
$54
$40
$22
$0
Refer to Table 17-3. Suppose the town enacts new antitrust laws that prohibit Maria and Miguel from operating as a monopoly. What will be the price of milk once Maria and Miguel reach a Nash
equilibrium?
a. $14
Chapter 15 Solutions
Microeconomics (13th Edition)
Ch. 15.1 - Prob. 1RQCh. 15.1 - Prob. 2RQCh. 15.1 - Prob. 3RQCh. 15.1 - Prob. 4RQCh. 15.2 - Prob. 1RQCh. 15.2 - Prob. 2RQCh. 15.2 - Prob. 3RQCh. 15.2 - Prob. 4RQCh. 15.2 - Prob. 5RQCh. 15.2 - Prob. 6RQ
Ch. 15.3 - Prob. 1RQCh. 15.3 - Prob. 2RQCh. 15.4 - Prob. 1RQCh. 15.4 - Prob. 2RQCh. 15.4 - Prob. 3RQCh. 15.4 - Prob. 4RQCh. 15.4 - Prob. 5RQCh. 15 - Prob. 1SPACh. 15 - Prob. 2SPACh. 15 - Prob. 3SPACh. 15 - Prob. 4SPACh. 15 - Prob. 5SPACh. 15 - Prob. 6SPACh. 15 - Prob. 7SPACh. 15 - Prob. 8SPACh. 15 - Prob. 9APACh. 15 - Prob. 10APACh. 15 - Prob. 11APACh. 15 - Prob. 12APACh. 15 - Prob. 13APACh. 15 - Prob. 14APACh. 15 - Prob. 15APACh. 15 - Prob. 16APACh. 15 - Prob. 17APACh. 15 - Prob. 18APACh. 15 - Prob. 19APACh. 15 - Prob. 20APACh. 15 - Prob. 21APACh. 15 - Prob. 22APACh. 15 - Prob. 23APA
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