7 Question 5 of 24 - HW16: Ho × Question 19 of 19 - HW15: Ho X M Changing a Major // Advising Gwhere to find cartel profit on X + ng.com/sac/10376090#/10376090/18/4 ✓ A Pause 50 pts 0 Hint Submit Answer uestion 19 of 19 > The accompanying payoff matrix presents the profits for Firm A and Firm B under two pricing strategies. © Macmillan Learning Firm A's strategy High price Low price Firm A Profit = $87 Firm A Profit = $113 High price Firm B Profit = $87 Firm B Profit = $41 Firm B's strategy Firm A Profit = $41 Low price Firm B Profit = $113 Firm A Profit = $71 Firm B Profit = $71 Suppose both firms have agreed to employ strategies that maximize their combined profits. How will the firms act? Firm A will agree to Set a high price Set a low price Firm B will agree to Set a low price Set a high price Attempt 6 Compare the profits of Firm A when both firms respect the collusive agreement to the profits of Firm A when Firm A secretly cheats on the agreement. How much additional profit would Firm A earn by secretly cheating on the agreement to collude? Round your answer to the nearest whole number. Firm A's additional profit when cheating: $ 26 80 F3 Q F4 + $ 4 < DII A F5 F6 F7 F8 F9 25 % 6 CO & * ) 7 8 9 0 A F10 F11 F12 + ||
7 Question 5 of 24 - HW16: Ho × Question 19 of 19 - HW15: Ho X M Changing a Major // Advising Gwhere to find cartel profit on X + ng.com/sac/10376090#/10376090/18/4 ✓ A Pause 50 pts 0 Hint Submit Answer uestion 19 of 19 > The accompanying payoff matrix presents the profits for Firm A and Firm B under two pricing strategies. © Macmillan Learning Firm A's strategy High price Low price Firm A Profit = $87 Firm A Profit = $113 High price Firm B Profit = $87 Firm B Profit = $41 Firm B's strategy Firm A Profit = $41 Low price Firm B Profit = $113 Firm A Profit = $71 Firm B Profit = $71 Suppose both firms have agreed to employ strategies that maximize their combined profits. How will the firms act? Firm A will agree to Set a high price Set a low price Firm B will agree to Set a low price Set a high price Attempt 6 Compare the profits of Firm A when both firms respect the collusive agreement to the profits of Firm A when Firm A secretly cheats on the agreement. How much additional profit would Firm A earn by secretly cheating on the agreement to collude? Round your answer to the nearest whole number. Firm A's additional profit when cheating: $ 26 80 F3 Q F4 + $ 4 < DII A F5 F6 F7 F8 F9 25 % 6 CO & * ) 7 8 9 0 A F10 F11 F12 + ||
Principles of Microeconomics (MindTap Course List)
8th Edition
ISBN:9781305971493
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter17: Oligopoly
Section: Chapter Questions
Problem 9PA
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Question
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Transcribed Image Text:7
Question 5 of 24 - HW16: Ho
×
Question 19 of 19 - HW15: Ho X
M
Changing a Major // Advising
Gwhere to find cartel profit on
X
+
ng.com/sac/10376090#/10376090/18/4
✓
A Pause
50 pts
0
Hint
Submit Answer
uestion 19 of 19 >
The accompanying payoff matrix presents the profits for Firm A and Firm B under two pricing strategies.
© Macmillan Learning
Firm A's strategy
High price
Low price
Firm A Profit = $87
Firm A Profit = $113
High price
Firm B Profit = $87
Firm B Profit = $41
Firm B's strategy
Firm A Profit = $41
Low price
Firm B Profit = $113
Firm A Profit = $71
Firm B Profit = $71
Suppose both firms have agreed to employ strategies that maximize their combined profits. How will the firms act?
Firm A will agree to
Set a high price
Set a low price
Firm B will agree to
Set a low price
Set a high price
Attempt 6
Compare the profits of Firm A when both firms respect the collusive agreement to the profits of Firm A when Firm A secretly
cheats on the agreement. How much additional profit would Firm A earn by secretly cheating on the agreement to collude?
Round your answer to the nearest whole number.
Firm A's additional profit when cheating: $
26
80
F3
Q
F4
+
$
4
<
DII
A
F5
F6
F7
F8
F9
25
%
6
CO
&
*
)
7
8
9
0
A
F10
F11
F12
+ ||
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