Consider the payoff matrix at right. OA. The high output-high output pair of strategies is a collusive outcome. OB. The low output-low output pair of strategies is a Nash equilibrium. OC. The high output-high output and low output-low output pairs of strategies are collusive outcomes. OD. The high output-high output and low output-low output pairs of strategies are Nash equilibria. E. The low output-low output pair of strategies is a collusive outcome. Firm B High Output Low Output Firm A High Output $22 $22 $32 $6 Low Output $6 $32 $25 $25

Consider the payoff matrix at right. OA. The high output-high output pair of strategies is a collusive outcome. OB. The low output-low output pair of strategies is a Nash equilibrium. OC. The high output-high output and low output-low output pairs of strategies are collusive outcomes. OD. The high output-high output and low output-low output pairs of strategies are Nash equilibria. E. The low output-low output pair of strategies is a collusive outcome. Firm B High Output Low Output Firm A High Output $22 $22 $32 $6 Low Output $6 $32 $25 $25

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Please do both of them correctly .

Consider the payoff matrix at right.
○ A. The high output-high output pair of strategies is a collusive outcome.
○ B. The low output - low output pair of strategies is a Nash equilibrium.
○ C. The high output-high output and low output - low output pairs of strategies are collusive outcomes.
○ D. The high output - high output and low output - low output pairs of strategies are Nash equilibria.
○ E. The low output - low output pair of strategies is a collusive outcome.
Firm B
High Output Low Output
Firm A
High Output ($22 $22 $32 $6
Low Output ($6) $32 $25 $25

Using the graph below, determine the output level at which the minimum efficient scale is achieved by the firm. The subscripts 1, 2, and 3 for the SRATC curves refer to different plant sizes.
The minimum efficient scale is achieved by this firm at output level
A. Q₂-
B. Q4
C. Q5
D. Q3.
E. Q1.
Cost
ठ
SRATC3 LRAC
SRATC₁
B
SRATC2
DS
E
F
C
Output
Q2
Q3
Q4

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