Consider the following simultaneous move game between two firms. The game is repeated and in each period the firms can choose to charge either a high price or a low price. The numbers represent the profit of each firm in each period based on their choices. The players must decide whether or not to adopt the following cooperation strategy: Each player will play "high price" as long as no one has played "low price" before. If someone has played "low price" before, then each player will play "low price" forever. Use this information to answer questions #10 and #11. Firm 2 10. If this game is repeated infinity, cooperation will be possible if High Price Low a. r< 100% b. r<75% c. r< 50% d. r< 25% e. full cooperation cannot be achieved in this game Price Low 15 , 15 50 ,0 Price High 0,50 30 , 30 Price If this game is repeated 1,000 times, cooperation will be possible if r< 100% b. r<75% c. r<50% d. r<25% full cooperation cannot be achieved in this а. е. game Firm 1

Consider the following simultaneous move game between two firms. The game is repeated and in each period the firms can choose to charge either a high price or a low price. The numbers represent the profit of each firm in each period based on their choices. The players must decide whether or not to adopt the following cooperation strategy: Each player will play "high price" as long as no one has played "low price" before. If someone has played "low price" before, then each player will play "low price" forever. Use this information to answer questions #10 and #11. Firm 2 10. If this game is repeated infinity, cooperation will be possible if High Price Low a. r< 100% b. r<75% c. r< 50% d. r< 25% e. full cooperation cannot be achieved in this game Price Low 15 , 15 50 ,0 Price High 0,50 30 , 30 Price If this game is repeated 1,000 times, cooperation will be possible if r< 100% b. r<75% c. r<50% d. r<25% full cooperation cannot be achieved in this а. е. game Firm 1

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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Discuss what can be the expected resultof the firms in the Cournot oligopoly, that is, that can be the expected Nash Equilibrium solution fora household cleaning appliance firm.
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