4:21lLTEWork13. In the Nash equilibrium of a prisoner'sdilemma:14. Suppose Acme and Mega produce andsell identical products and face zeromarginal and average cost. Below is themarket demand curve for their product432D0050200100150QuantitySuppose Acme and Mega decide to colludeand work together as a monopolist with eachfirm producing half the quantity demanded bythe market at the monopoly price. If Megacheats on the agreement by red ucing its priceto $1 and Acme matches the price cut, then ifconsumers are evenly split between the twofirms, Acme's economic profit will bePrice ($/unit)

Prisoner’s dilemma is a two criminals’ game and the outcome depends on the simultaneous decisions…

Answered: 4:21 lLTE Work 13. In the Nash…

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter9: Monopoly

Section: Chapter Questions

Problem 6SCQ: Imagine a monopolist could charge a different price to every customer based on how much he or she...

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When OPEC raised the price of oil dramatically in the mid-1970s, experts said it was unlikely that the cartel could stay together over the long term-that the incentives for individual members. to cheat would become too strong. More than fort),r years later, OPEC still exists. Why do you think OPEC has been able to beat the odds and continue to collude? Hint: You may wish to consider non-economic reasons.
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?
part 9 10 11 9. How doesthe price and output of a monopolist differ from thatofthe perfectly competitive A:industry? i.10. Whatportion of the consumer surplusin the competitive situation wastransferredto the firm inthe monopoly situation?11. How does a monopoly affect consumersurplus? Is this good or bad?
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Prior to 1995, Thad only one beer producer a government-owned monopoly called Tawan Bear Suppose that while it was a monopoly. The company was un in a way to maximize peolt for the government. That is assume that it behaved like a private, pro maximizing monopolist Assuming demand and cost conditions are given on the following diagram, at what we would Taiwan Bear have targeted output and what price would it have charged Now suppose that while it was a monopoly Tewan Beer decided to compete in the highly competitive American market Assume further than maintained import barriers so that American producers could not sat in Taiwan but that they were not immediately reciprocated Assung Tan Beer could set all that it could produce in the American market at a price P Pund the wing given Q nalou oldi Tang The new price in Taiwan after the The output sold in the US is given by 0-0, Ta progiven by the re A P OF P OP by O market openss Price ($) P₂ MR Quantity MC AC PU.S. Drin
50 40 30 20 10 200 400 600 B00 1000 Quantity per period Suppose there are no fixed costs and marginal cost is a constant $30. a. What sre the perfectiy competitve price and output? Price: $ 30 0 Output: 500 b. What are the cartel (monopoly) price snd output? Price: S 40 0 Output: 300 O c lfthere are only four firms in the cartel, what are the price and output of esch firm, assuming equal shares? Round your anawers to 1 decimal plece. Price:$ 40 0 Output: 75 0 sanuana pue Ssog
. Compare the quantity and price of an oligopoly tothose of a monopoly
1 Imagine an incumbent monopolist is currently earning a profit of $100 million. Suddenly, theincumbent faces an entry threat and is considering whether or not to limit price. If the incumbent allows theentrant to come into the market it will see its profit decline to $50 million. In the case of effectively impededentry, the profit earned by the incumbent if it decides to limit price will be:A. greater than $100 million.B. greater than $50 million but less than $100 million.C. less than $50 million.D. either B or C.
Suppose that a particular industry has a four-firm concentration ratio of 45 and a Herfindahi index of LS40. Most ikety, this industry would ochieve Mutipie Chaice both productive efficiency and allocative etficency wllocative efficency but not productive effcency nether productive efficiency nor allocative efficiency productive efficiency but not allocative efficiency
explains it correctlt
2
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