In Cerro Acuchimay, two stalls sell chicha de jora that have identical costs c; = 10y₁ + 20. mmm mmmmmmmmmm where i = 1, 2 and the demand is represented by y = 8-p. Despite the fact that there is a cartel solution consisting of reducing the quantity of chicha de jora offered, the possible strategies of the stalls are: be faithful to the cartel or deviate from the cartel's solution, that is, www offer more chicha de jora than the stalls in the agreement, thus increasing each position its offer unilaterally. In the agreed cartel solution, the stalls share the sales equally. www wwwwww www a) Calculate the benefits of the positions in each of the possible combinations of strategies. mmmmmm
In Cerro Acuchimay, two stalls sell chicha de jora that have identical costs c; = 10y₁ + 20. mmm mmmmmmmmmm where i = 1, 2 and the demand is represented by y = 8-p. Despite the fact that there is a cartel solution consisting of reducing the quantity of chicha de jora offered, the possible strategies of the stalls are: be faithful to the cartel or deviate from the cartel's solution, that is, www offer more chicha de jora than the stalls in the agreement, thus increasing each position its offer unilaterally. In the agreed cartel solution, the stalls share the sales equally. www wwwwww www a) Calculate the benefits of the positions in each of the possible combinations of strategies. mmmmmm
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:10y; + 20.
In Cerro Acuchimay, two stalls sell chicha de jora that have identical costs c₁ =
where i = 1, 2 and the demand is represented by y = 8-p. Despite the fact that there is a
cartel solution consisting of reducing the quantity of chicha de jora offered, the possible
mmmmm
strategies of the stalls are: be faithful to the cartel or deviate from the cartel's solution, that is,
offer more chicha de jora than the stalls in the agreement, thus increasing each position its offer
wwwww
www
unilaterally. In the agreed cartel solution, the stalls share the sales equally.
a) Calculate the benefits of the positions in each of the possible combinations of strategies.
www
b) It is Pareto efficient.
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