F28 Hidden Valley has two nail salons, one owned by Pat and the other owned by Danny.Suppose that Pat and Danny have two strategies: to collude, fix the monopoly price, and limit the number ofmanicures, or to break the collusion, cut the price, and produce more manicures.The table gives the payoff matrix of economic profit (in dollars) for the game that Pat and Danny play.Dannystrategi(blueWhat is the Nash equilibrium if the game is played once?squaresDo the people of Hidden Valley get the efficient quantity of manicures?If this game is played just once, the Nash equilibrium is thatO A. Pat colludes and Danny breaks the collusionO B. Pat breaks the collusion and Danny colludesO C. Pat and Danny either collude or break the collusion but we don't know for sureO D. both Pat and Danny colludeO E. both Pat and Danny break the collusionThe people of Hidden Valleythe efficient quantity of manicures from Pat and Danny because they produce the same quantity as would be producedO A. receive; in perfect competitionO B. do not receive; by a monopolyMacBook Proesc888:::!@#$&12478QWEtabYU一ASDG Hraps lockFR Pat's strategies(red squares)ColludeDon't collude10.0016.00Danny'sstrategies(bluesquares)Collude10.00-5.00<-5.0001Don't16.00colludey as would be produced

Given; There are 2 nail salons in Hidden Valley. Pat and Danny have two strategy:- 1) To collude.…

Hidden Valley has two nail salons, one owned by Pat and the other owned by Danny. Suppose that Pat and Danny have two strategies: to collude, fix the monopoly price, and limit the number of manicures, or to break the collusion, cut the price, and produce more manicures. The table gives the payoff matrix of economic profit (in dollars) for the game that Pat and Danny play. st What is the Nash equilibrium if the game is played once? Do the people of Hidden Valley get the efficient quantity of manicures? .... If this game is played just once, the Nash equilibrium is that A. Pat colludes and Danny breaks the collusion B. Pat breaks the collusion and Danny colludes C. Pat and Danny either collude or break the collusion but we don't know for sure D. both Pat and Danny collude OE. both Pat and Danny break the collusion The people of Hidden Valley, the efficient quantity of manicures from Pat and Danny because they produce the same quantity as would be produced A. receive; in perfect competition B. do not receive; by a monopoly

Hidden Valley has two nail salons, one owned by Pat and the other owned by Danny. Suppose that Pat and Danny have two strategies: to collude, fix the monopoly price, and limit the number of manicures, or to break the collusion, cut the price, and produce more manicures. The table gives the payoff matrix of economic profit (in dollars) for the game that Pat and Danny play. st What is the Nash equilibrium if the game is played once? Do the people of Hidden Valley get the efficient quantity of manicures? .... If this game is played just once, the Nash equilibrium is that A. Pat colludes and Danny breaks the collusion B. Pat breaks the collusion and Danny colludes C. Pat and Danny either collude or break the collusion but we don't know for sure D. both Pat and Danny collude OE. both Pat and Danny break the collusion The people of Hidden Valley, the efficient quantity of manicures from Pat and Danny because they produce the same quantity as would be produced A. receive; in perfect competition B. do not receive; by a monopoly

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

F28

Hidden Valley has two nail salons, one owned by Pat and the other owned by Danny.
Suppose that Pat and Danny have two strategies: to collude, fix the monopoly price, and limit the number of
manicures, or to break the collusion, cut the price, and produce more manicures.
The table gives the payoff matrix of economic profit (in dollars) for the game that Pat and Danny play.
Danny
strategi
(blue
What is the Nash equilibrium if the game is played once?
squares
Do the people of Hidden Valley get the efficient quantity of manicures?
If this game is played just once, the Nash equilibrium is that
O A. Pat colludes and Danny breaks the collusion
O B. Pat breaks the collusion and Danny colludes
O C. Pat and Danny either collude or break the collusion but we don't know for sure
O D. both Pat and Danny collude
O E. both Pat and Danny break the collusion
The people of Hidden Valley
the efficient quantity of manicures from Pat and Danny because they produce the same quantity as would be produced
O A. receive; in perfect competition
O B. do not receive; by a monopoly
MacBook Pro
esc
888
:::
!
@
#
$
&
1
2
4
7
8
Q
W
E
tab
Y
U
一
A
S
D
G H
raps lock
F
R

Pat's strategies
(red squares)
Collude
Don't collude
10.00
16.00
Danny's
strategies
(blue
squares)
Collude
10.00
-5.00
<-5.00
01
Don't
16.00
collude
y as would be produced

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