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Consider a town in which only two residents, Jacques and Kyoko, own wells that produce water safe for drinking. Jacques and Kyoko can pump and sell as much water as they want at no cost. For them, total revenue equals profit. The following table shows the town's demand schedule for water. fill in every blank!! NOTE: options for first

Consider a town in which only two residents, Jacques and Kyoko, own wells that produce water safe for drinking. Jacques and Kyoko can pump and sell as much water as they want at no cost. For them, total revenue equals profit. The following table shows the town's demand schedule for water. fill in every blank!! NOTE: options for first

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Consider a town in which only two residents, Jacques and Kyoko, own wells that produce water safe for drinking. Jacques and Kyoko can pump and sell as much water as they want at no cost. For them, total revenue equals profit. The following table shows the town's demand schedule for water.

fill in every blank!!

NOTE: options for first drop down question is (decreases or increases)

options for second drop down question is (tying,  a tit for tat strategy, a dominant strategy, a prisioners dilemma)

5.50 45 $247.50 5.00 90 $450.00 4.50 135 $607.50 4.00 180 $720.00 3.50 225 $787.50 3.00 270 $810.00 2.50 315 $787.50 2.00 360 $720.00 1.50 405 $607.50 1.00 450 $450.00 0.50 495 $247.50 540 Suppose Jacques and Kyoko form a cartel and behave as a monopolist. The profit-maximizing price is 5 per litre, and the total output is litres. As part of their cartel agreement, Jacques and Kyoko agree to split production equally. Therefore, Jacques's profit is and Kyoko's profit is S Suppose that Jacques and Kyoko have been successfully operating as a cartel. They each charge the monopoly price and sell half of the monopoly quantity. Then one night before going to sleep, Jacques says to himself, "Kyoko and I aren't the best of friends anyway. If I increase my production to 45 litres more than the cartel amount, I can increase my profit even though her profit goes down. I will do that starting tomorrow." After Jacques implements his new plan, the price of water to $ per litre. Given Kyoko and Jacques's production levels, Jacques's profit becomes and Kyoko's profit becomes S Because Jacques has deviated from the cartel agreement and increased his output of water to 45 litres more than the cartel amount, Kyoko decides that she will also increase her production to 45 litres more than the cartel amount. After Kyoko increases her production, Jacques's profit becomes s sum of the profits of Jacques and Kyoko) is now5 Kyoko's profit becomes 5 and total profit (the True or False: Based on the fact that both Jacques and Kyoko increased production from the initial cartel quantity, you know that the output effect was larger than the price effect at that quantity. O True O False Note that Jacques and Kyoko started by behaving cooperatively. However, once Jacques decided to cheat, Kyoko decided to cheat as well. In other words, Kyoko's output decisions are based on Jacques's actions. This behaviour is an example of
Transcribed Image Text:5.50 45 $247.50 5.00 90 $450.00 4.50 135 $607.50 4.00 180 $720.00 3.50 225 $787.50 3.00 270 $810.00 2.50 315 $787.50 2.00 360 $720.00 1.50 405 $607.50 1.00 450 $450.00 0.50 495 $247.50 540 Suppose Jacques and Kyoko form a cartel and behave as a monopolist. The profit-maximizing price is 5 per litre, and the total output is litres. As part of their cartel agreement, Jacques and Kyoko agree to split production equally. Therefore, Jacques's profit is and Kyoko's profit is S Suppose that Jacques and Kyoko have been successfully operating as a cartel. They each charge the monopoly price and sell half of the monopoly quantity. Then one night before going to sleep, Jacques says to himself, "Kyoko and I aren't the best of friends anyway. If I increase my production to 45 litres more than the cartel amount, I can increase my profit even though her profit goes down. I will do that starting tomorrow." After Jacques implements his new plan, the price of water to $ per litre. Given Kyoko and Jacques's production levels, Jacques's profit becomes and Kyoko's profit becomes S Because Jacques has deviated from the cartel agreement and increased his output of water to 45 litres more than the cartel amount, Kyoko decides that she will also increase her production to 45 litres more than the cartel amount. After Kyoko increases her production, Jacques's profit becomes s sum of the profits of Jacques and Kyoko) is now5 Kyoko's profit becomes 5 and total profit (the True or False: Based on the fact that both Jacques and Kyoko increased production from the initial cartel quantity, you know that the output effect was larger than the price effect at that quantity. O True O False Note that Jacques and Kyoko started by behaving cooperatively. However, once Jacques decided to cheat, Kyoko decided to cheat as well. In other words, Kyoko's output decisions are based on Jacques's actions. This behaviour is an example of
Consider a town in which only two residents, Jacques and Kyoko, own wells that produce water safe for drinking. Jacques and Kyoko can pump and sell as much water as they want at no cost. For them, total revenue equals profit. The following table shows the town's demand schedule for water. Price Quantity Demanded Total Revenue (Dollars per litre) (Litres of water) (Dollars) 6.00 5.50 45 $247.50 5.00 90 $450.00 4.50 135 $607.50 4.00 180 $720.00 3.50 225 $787.50 3.00 270 $810.00 2.50 315 $787.50 2.00 360 $720.00 1.50 405 $607.50 1.00 450 $450.00 0.50 495 $247.50 540 Suppose Jacques and Kyoko form a cartel and behave as a monopolist. The profit-maximizing price is s per litre, and the total output |litres. As part of their cartel agreement, Jacques and Kyoko agree to split production equally. Therefore, Jacques's profit is |, and Kyoko's profit is s is Suppose that Jacques and Kyoko have been successfully operating as a cartel. They each charge the monopoly price and sell half of the monopoly quantity. Then one night before going to sleep, Jacques says to himself, "Kyoko and I aren't the best of friends anyway. If I increase my production to 45 litres more than the cartel amount, I can increase my profit even though her profit goes down. I will do that starting tomorrow." After Jacques implements his new plan, the price of water levels, Jacques's profit becomes 5 to per litre. Given Kyoko and Jacques's production and Kyoko's profit becomes s Because Jacques has deviated from the cartel agreement and increased his output of water to 45 litres more than the cartel amount, Kyoko decides that she will also increase her production to 45 litres more than the cartel amount. After Kyoko increases her production, Jacques's profit becomes Kyoko's profit becomes s and total profit (the sum of the profits of Jacques and Kyoko) is now 5 True or False: Based on the fact that both Jacques and Kyoko increased production from the initial cartel quantity, you know that the output effect was larger than the price effect at that quantity. O True O False
Transcribed Image Text:Consider a town in which only two residents, Jacques and Kyoko, own wells that produce water safe for drinking. Jacques and Kyoko can pump and sell as much water as they want at no cost. For them, total revenue equals profit. The following table shows the town's demand schedule for water. Price Quantity Demanded Total Revenue (Dollars per litre) (Litres of water) (Dollars) 6.00 5.50 45 $247.50 5.00 90 $450.00 4.50 135 $607.50 4.00 180 $720.00 3.50 225 $787.50 3.00 270 $810.00 2.50 315 $787.50 2.00 360 $720.00 1.50 405 $607.50 1.00 450 $450.00 0.50 495 $247.50 540 Suppose Jacques and Kyoko form a cartel and behave as a monopolist. The profit-maximizing price is s per litre, and the total output |litres. As part of their cartel agreement, Jacques and Kyoko agree to split production equally. Therefore, Jacques's profit is |, and Kyoko's profit is s is Suppose that Jacques and Kyoko have been successfully operating as a cartel. They each charge the monopoly price and sell half of the monopoly quantity. Then one night before going to sleep, Jacques says to himself, "Kyoko and I aren't the best of friends anyway. If I increase my production to 45 litres more than the cartel amount, I can increase my profit even though her profit goes down. I will do that starting tomorrow." After Jacques implements his new plan, the price of water levels, Jacques's profit becomes 5 to per litre. Given Kyoko and Jacques's production and Kyoko's profit becomes s Because Jacques has deviated from the cartel agreement and increased his output of water to 45 litres more than the cartel amount, Kyoko decides that she will also increase her production to 45 litres more than the cartel amount. After Kyoko increases her production, Jacques's profit becomes Kyoko's profit becomes s and total profit (the sum of the profits of Jacques and Kyoko) is now 5 True or False: Based on the fact that both Jacques and Kyoko increased production from the initial cartel quantity, you know that the output effect was larger than the price effect at that quantity. O True O False
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