2. The state has announced its plans to license two firms to serve a market whose demand curve is Een by P=100-Q. The technology is such that each can produce any given level of output at zero t, but once each firm's output is chosen, it cannot be altered. What's the most you would be willing to pay for one of these licenses if you knew you would be able to choose your level of output first (Assuming your choice was observable by the rival firm)? b. How much would your rival be willing to pay for the right to choose second?

2. The state has announced its plans to license two firms to serve a market whose demand curve is Een by P=100-Q. The technology is such that each can produce any given level of output at zero t, but once each firm's output is chosen, it cannot be altered. What's the most you would be willing to pay for one of these licenses if you knew you would be able to choose your level of output first (Assuming your choice was observable by the rival firm)? b. How much would your rival be willing to pay for the right to choose second?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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