As discussed in the lecture, if producers limit the supply of a product (like chickens) they are counting on what to dirive prices up? Multiple Cholce
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As discussed in the lecture, if producers limit the supply of a product (like chickens) they are counting on what to dirive prices up?
Multiple Cholce
Producer-producer nvalty
Consumer-consumer rivoiry
Producer-consumer mairy
None of the abow
Step by step
Solved in 3 steps
- Use the table to answer the question.Peter and Olga live near a lake with open fishing, and both have fishing boats there. They are the only two sellers in their local fish market. What is likely to be the outcome in a Nash equilibrium? Peter and Olga Fish in the Lake Peter fishes every day Olga fishes every day Both Olga and Peter have smaller and smaller catches over time Peter fishes two times each week Olga catches and sells more fish than Peter Olga fishes two timeseach week Peter catches and sells more fish than Olga Both Olga and Peter have large catches each fishing trip Oa. Both Olga and Peter continue to have large catches on each fishing trip. Ob. Peter catches and sells more fish than Olga. OC. Olga catches and sells more fish than Peter. Od. Both Olga and Peter have smaller and smaller catches over time.It’s increasingly clear that many postings on blogs and product reviews on Web sites are fake or are posted there to manipulate consumers’ opinions. How big a problem is this if consumers increasingly look to consumer-generated product reviews to guide their purchase decisions? What steps, if any, can marketers take to nip this problem in the bud?Jane and Sara are competing orange juice salespersons in Amherst. Their stands are next to each other on a street and consumers regard them as identical. The marginal cost of an orange juice is $1. The demand for orange juice every hour is Q = 20 − P where P is the lowest price between the two salespersons. If their prices are equal they split demand equally. a. If they set prices simultaneously (prices can be any real number), what is the Nash equilibrium price? b. If, against what we have assumed in class, orange juice salespersons have to charge prices in whole dollars ($1, $2, $3, etc), what are the Nash equilibrium prices? c. Assuming whole dollar pricing, if Jane sets her price before Sara, what price would she charge? Answer all 3 parts
- Suppose the costs of producing a low-quality blue-tooth headphone is $12 and $16 to produce a high-quality one. Consumers cannot distinguish high-quality from low- quality prior to buying. Assume that consumers value headphones at their cost of production and are risk-neutral. a) How many of the firms produce will produce high-quality speakers and how many produce low-quality speakers? b) Describe the equilibrium in this market. c) What happens if consumers are willing to pay $36 for high-quality speakers. Describe this new equilibrium. d) Compare parts b) and c). Explain all your results. Please show equations to justify the answer. Thank you!TRUE OR FALSE? An increase in price tends to make consumer buy less and sellers to sell more. A price decrease tends to cause the opposite reaction. An increase in income will shift the demand curve to the left on the graph. A decrease in income will shift the demand curve to the right. Shifts in either the demand curve alone or the supply curve alone cannot cause a change in the equilibrium point. It is only when both the demand curve and supply curve shift that the equilibrium point is changed.Give one example each to the following statements. Explain your answer. A. A Nash Equilibrium may not be Pareto Efficient. B. There exist mechanisms to induce cooperation in the Prisoner's Dilemma game. C. The pursuit of self-interest without regard for others sometimes leads to outcomes that are socially desirable.
- Discuss value-based pricing in a market economywhat is the Nash equilibrium to this problem? is the equilibrium efficient?Suppose Grady, Grace, and George own the 3 wrecker services in the small town of Collisionville. Each currently charges $350 for a standard towing job within town. Competition is heating up and each wants to grow their market share. Use this information to answer the following: What does the Law of Demand say that Grace can do to grow her market share? Suppose that the Kinked Demand Curve Theory describes this market well. How would considering this theory impact Grace’s decision on part 1?
- You and your rival must simultaneously decide what price to advertise in the weekly newspaper. If you each charge a low price, you each earn zero profits. If you each charge a high price, you each earn profits of GH¢3. If you charge different prices, the one charging the higher price loses GH¢5 and the one charging the lower price makes GH¢5.i. Find the equilibrium when there are no repeated transactions.Consider trade relations between the United States and Mexico. Assume that the leaders of the two countries believe the payoffs to alternative trade policies are as follows a. What is the dominant strategy for the United States? For Mexico? Explain. b. Define Nash equilibrium. What is the Nash equilibrium for trade policy? c. In 1993, the U.S.Congress ratified the North American Free Trade Agreement, in which the United States and Mexico agreed to reduce trade barriers simultaneously. Do the perceived payoffs shown here justify this approach to trade policy? Explain. d. Based on your understanding of the gains from trade (discussed in Chapters 3 and 9), do you think that these payoffs actually reflect a nation's welfare under the four possible outcomes?Suppose the market for hats is competitive, with many small producers of hats, each of them unable to affect the market price of hats, and many consumers. And suppose there is an increase in the demand for hats. (a) How would an increase in demand affect the demand curve and supply curve for hats; and how would it change the equilibrium price and quantity of hats sold? (b) The Core Economics text observes that "price-taking is no longer a “Nash equilibrium". What is a “Nash equilibrium"? And why is price-taking no longer one? (c) When the market is not in equilibrium, it is said that the short side of the market dominates. What does this mean? (d) What are "economic rents"? How does "rent seeking" enter the process of price adjustment? (e) In what ways might the market for hats differ from "the labour market"?