(a) Describe the concept of a (pure strategy) Nash equilibrium; provide an illustrative example. Describe the concept of a mixed-strategy Nash equilibrium; provide an illustrative example. Within the context of oligopoly, discuss the differences between a Cournot-Nash equilibrium and a Bertrand-Nash equilibrium. (b) In terms of output, price, consumer surplus, profits and societal welfare, contrast the monopoly equilibrium with the perfectly competitive equilibrium. Describe how the introduction of: (i) perfect price discrimination; and, (ii) increasing returns to scale (i.e. a downward sloping average cost curve) would impact on this comparison?!

(a) Describe the concept of a (pure strategy) Nash equilibrium; provide an illustrative example. Describe the concept of a mixed-strategy Nash equilibrium; provide an illustrative example. Within the context of oligopoly, discuss the differences between a Cournot-Nash equilibrium and a Bertrand-Nash equilibrium. (b) In terms of output, price, consumer surplus, profits and societal welfare, contrast the monopoly equilibrium with the perfectly competitive equilibrium. Describe how the introduction of: (i) perfect price discrimination; and, (ii) increasing returns to scale (i.e. a downward sloping average cost curve) would impact on this comparison?!

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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9.17
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