Q: 9: Suppose there are two restaurants on an island, Ace's (A) and Betty's (B). They both have to…
A: Since we only answer up to 2 sub-parts for complex questions, we’ll answer the first 2. Please…
Q: harge a hig
A: Given : Firm A Price Low High Low 0, 0 50; -40 High -40, 50 10; 10
Q: Suppose that market demand is given by ? = 120 − ?/3. The two identical firms in the market both…
A: P = 120 - Q/3 MC = 20 2 Identical firm (therefore Q = Q1+Q2)
Q: ext year after Matt decides to renew his lease. (maybe unwisely depending on how you swered the…
A: It is given that Chris Hemsworth lies about body shredding capabilities of rutabaga and the demand…
Q: Suppose that currently there are no airlines serving the city of South Podunk. Both Accommodating…
A: In game theory, the extended form is far distinguished from describing the game using the game tree.…
Q: The demand for carpet-cleaning services is P=130-Q. There are 20 identical firms that clean carpets.…
A: a) P=130-Q MC=$30 Competitive Equilibrium; P=MC…
Q: Two firms engage in Cournot competition in the Everlasting Gobstopper industry. The price elasticity…
A: Given:-Elasticity of demand=-2Firm 1 marginal cost=$365Firm 2 marginal cost=$602.25To…
Q: Consider a market with two firms, Kellogg and Post, that sell breakfast cereals. Both companies must…
A: Equilibrium: Economic harmony is a circumstance where financial powers, for example, market…
Q: 1. Best responses in a Cournot Oligopoly Firm A and Firm B sell identical goods Total market demand…
A: “Since multiple questions have been asked by you, we will solve the first question. Please specify…
Q: Consider a two-player game between Child's Play and Kid's Corner, each of which produces and sells…
A: Since you have posted a question with multiple sub-parts, we will solve first three sub-part for…
Q: p= 00 -a. n firm has a marginal cost of $15 per unit. at is the Cournot equilibrium? Cournot…
A: Answer.
Q: Question 1: Suppose Southwest (S) and JetBlue (J) choose a number of flights, and qj respectively,…
A: Hello. Since your question has multiple sub-parts, we will solve first three sub-parts for you. If…
Q: irms A and B under duopoly (oligopoly) are competing in an engine production market. Firm A’s…
A: Firm's A MC = $14 Firm's B MC= $15
Q: 3) Amazon and Target both sell the new Xbox, and have a choice whether to charge a high price or a…
A: A Dominant strategy is the strategy that yields higher payoff and the strategy doesn't change with…
Q: 1. Two firms (A and B) play a competition game (i.e. Cournot) in which they can choose any Qi from 0…
A: In a Cournot duopoly, which is a specific market structure involving two firms, each firm makes its…
Q: The Tampa Tribune and the St. Petersburg Times compete for readers in the Tampa Bay market for…
A: We are going to check if provided game represents Prisoner's dilemma.
Q: Consider an oligopoly with 9 identical firms, and all firms produce a homogenous product. All firms…
A: “Since you have posted multiple questions, we will provide the solution only to the first question…
Q: Consider the following statements about the Stackelberg game from the slides, assuming both firms…
A: Answer-
Q: ce strategies with corresponding protits are depicted in the payoff matrix to the right Target's…
A: The Nash equilibrium is a decision-making theorem within game theory that states a player can…
Q: suppose OPEC has only two producers, Saudi Arabia and Nigeria. Saudi Arabia has far more oil…
A: This question focuses on determining the nature of the Nash equilibrium in this game theory…
Q: The Tampa Tribune and the St. Petersburg Times compete for readers in the Tampa Bay market for…
A: We are going to solve a Pure strategy Nash equilibrium to answer this question
Q: Using a payoff matrix to determine the equilibrium outcome Suppose there are only two firms that…
A: Since we only answer up to 3 sub-parts we will answer first 3. Please resubmit a new question…
Q: 14 В ш Firm B High Price Low Price Firm A High Price A = $250 B-$250 A = $200 Low Price Multiple…
A: A pay-off matrix is a method for communicating the consequence of players' decisions in a game. A…
Q: Once upon a time, there was a one and only Versace beer seller supplying beer exclusively for the…
A: 1. Market before split:- Before split there is only one seller who is supplying beer to the entire…
Q: How would the Cournot equilibrium change in the airline example if American's marginal cost were…
A: The optimum response function for each nation must first be derived before we can calculate the…
Q: 3. Suppose that two clothing manufacturers, Lands' End and L.L. Bean, are deciding what price to…
A: Game theory studies how individuals or groups make decisions in strategic situations where the…
Q: Oligopoly Consider a market in which the market demand curve is given by P = 18 - Q, Firm 1 has a…
A: Market demand curve: The sum of all individual demand curves in a market is the market demand curve.…
Q: Suppose oil production in the Gulf of Mexico was a symmetric horizontal oligopoly in Cournot…
A: Given demand function Q=12000-20P MC=$50
Q: Suppose that GE is trying to prevent Maytag from entering the market for high efficiency clothes…
A:
Q: Consider the following simultaneous move game between two firms. Each firm can charge either a low…
A: Above game consists of two players : Firm 1 & 2 Strategy Set of firm 1 = Strategy Set of firm…
Q: .. Two firms compete in price in a market for infinite periods. In this market, there are N…
A: 1 a) In infinite repeated bertrañd game, both the firms will follow Grim trigger strategy: Set…
Q: Consider two firms, referred to as firms 1 and 2, who compete in a market by choosing quantities…
A: Demand function : P (Q) = 10 - 2Q Marginal Cost of each firm = 4 Number of firms in the market is 2…
Q: Consider the following "location game." There are two ice cream sellers (Seller 1 and Seller 2) in a…
A: Location Game is defined as a kind of a pervasive game where the game evolves around the players…
Q: Two firms with differentiated products are competing in price. Firm A and B face the following…
A: To find the Nash equilibrium price, quantity, and profit for each firm, we need to solve for the…
Q: Suppose three Cournot competitors, each with costs Ci = 30qi, face an inverse market demand curve of…
A: In the world of economics, there exists a type of industrial framework called "Cournot competition,"…
Q: Assume that Acme and Gamma are the two main rivals in the market for hair dryers. Each firm is…
A: 1) The data given of profits is shown in tabular form below Gamma Acme Price= $50 Price =$60…
Q: QUESTION 1B. Continuing with the inverse demand, P = 50 - Q, if each firm has a marginal cost of 0,…
A: Cournot competition is an economic model used to describe an industry structure in which companies…
Q: Consider a market with an incumbent and two potential entrants. The incumbent can take on one…
A: Game theory is the process of modeling the strategic interaction between two or more players in a…
Q: 2. Consider a Cournot competition environment with one good and two firms, Firm 1 and Firm 2. The…
A: Dear student, find a detailed answer and step by step solution in the explanation part…
Q: (Bertrand's duopoly game with discrete prices) Consider the variant of the example of Bertrand's…
A: Bertrand's duopoly model highlights the competition between the two firms in the production of…
Q: 4. Two firms face the following payoff matrix, where each is choosing whether to charge a low or…
A: Pure strategy Nash Equilibrium: Nash equilibrium with 2 players is the strategy profile where both…
Q: 1. Consider the following Cournot model. The inverse demand function is given by p = 30 –Q, where Q…
A: In Cournot duopoly, two firms compete in quantity and simultaneously choose the optimal quantity…
Q: Question 1 Suppose the romaine lettuce industry is a Cournot duopoly with the following two firms:…
A: The objective of the question is to find the output of Amalgamated Romaine, the output of Best…
Q: 2. Four firms (A, B, C, and D) play a pricing game (i.e. Bertrand). Each firm (i) may choose any…
A: Demand:Demand is the desire of an individual ability and willingness to pay for a product. The…
Q: Duopoly: 1. Consider a duopoly game with 2 firms. The market inverse demand curve is given by P(Q) =…
A: In game theory, the Nash equilibrium, named after the mathematician John Nash, is the most common…
Q: Consider two firms that are choosing the price of competing products. The choices are contained in…
A: Dominated strategy : it is the strategy that gives minimum payoff to a player compared to his other…
Suppose firm A and firm B repeatedly face the situation presented in Table and the interest rate is 40 percent. The firms agree to charge a high
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
- 1. Two firms compete in price in a market for infinite periods. In this market, there are N consumers; each buys one unit per period if the price does not exceed $10 and nothing otherwise. Consumers buy from the firm selling at a lower price. In case both firms charge the same price, assume N/2 consumers buy from each firm. Assume zero production cost for both firms. A possible strategy that may support the collusive equilibrium is: Announce a price of $10 if the equilibrium price has always been $10; otherwise, announce the price as in Nash equilibrium of the one-shot Bertrand game. 1.a Let & be the discount factor. Find the condition on & such that the above strategy can indeed support the collusive equilibrium. Now suppose that Firm 2's marginal cost is $4, but Firm 1's marginal cost remains at zero. 1.b Find the condition on & under which Firm 2 will not deviate from the collusive equilibrium. 1.c Find the condition on under which Firm 1 will not deviate from the collusive…1. Two firms compete in price in a market for infinite periods. In this market, there are N consumers; each buys one unit per period if the price does not exceed $10 and nothing otherwise. Consumers buy from the firm selling at a lower price. In case both firms charge the same price, assume N/2 consumers buy from each firm. Assume zero production cost for both firms. A possible strategy that may support the collusive equilibrium is: Announce a price of $10 if the equilibrium price has always been $10; otherwise, announce the price as in Nash equilibrium of the one-shot Bertrand game.HP and Sony compete primarily by price. Each firm must choose either a high price or a low price simultaneously. Use the following information to create the profit matrix: If HP and Lenovo both set high prices, HP’s profit is $40 million and Sony’s profit is $35 million. If HP sets high price and Sony sets low price, HP’s profit is $25 million and Sony’s profit is $40 million. If HP sets low price and Sony sets high price, HP’s profit is $50 million and Sony’s profit is $10 million. If HP and Sony set low prices, HP has $20 million and Sony has $15 million. Please answer the follow questions: Does Sony have a dominant strategy? HP? If so, which one? If HP and Sony maximize their profits non-cooperatively, what is the Nash-equilibrium for this profit matrix? Instead, if HP and Sony maximize their joint profits cooperatively, what is the equilibrium? Assume they keep their agreements.
- 4. Two Stackelberg-competitors with no costs face the common market demand curve P=30−Q, where Q is the combined output of both firms. Firm 1, the leader, picks its output first. Then Firm 2, the follower, picks its output. How much output does Firm 2 produce in their sequential-move game? a) 3 units. b) 15 units. c) 15/2 units. d) 30 units.2. Consider the following "location game." There are two ice cream sellers (Seller 1 and Seller 2) in a small city. Residents are uniformly located on a straight street of length 1. The ice cream sellers need to choose where to set up their carts, and each resident will purchase one unit of ice cream from the nearest seller. The city council has fixed the price of the ice cream, and as a result, each seller just wants sell as much ice cream as possible. (a) We think of this "location game" as a simultaneous-move game, in which each player's payoff is the proportion of residents that buy from her cart. Is this game with discrete strategies or continuous strategies? Please state the set of (pure) strategies for both sellers. Is this game zero-sum or non-zero-sum? (b) Find all NE(s) of this game. (c) Is there an alternative pair of locations for the sellers such that the residents’ total walking distance is reduced but neither seller is hurt? Is it an NE? (d) Suppose now that there are…Using a payoff matrix/table to determine the equilibrium outcome Suppose there are only two firms that sell smartphones, Flashfone and Pictech. The following payoff matrix/table shows the profit (in millions of dollars) each company will earn, depending on whether it sets a high or low price for its phones. Pictech Pricing High Low Flashfone Pricing High 10, 10 4, 12 Low 12, 4 9, 9 For example, the lower left cell shows that if Flashfone prices low and Pictech prices high, Flashfone will earn a profit of $12 million and Pictech will earn a profit of $4 million. Assume this is a simultaneous game and that Flashfone and Pictech are both profit-maximizing firms. If Flashfone prices high, Pictech will make more profit if it chooses a price, and if Flashfone prices low, Pictech will make more profit if it chooses a price. If Pictech prices high, Flashfone will make more profit if it chooses a price, and if Pictech prices low, Flashfone will make…
- Let ci be the constant marginal and average cost for firm i (so that firms may have different marginal costs). Suppose demand is given by P=1-Q. Calculate the Nash equilibrium quantities assuming there are two firms in a Cournot market. Also compute market output, market price, firm profits, industry prof- its, consumer surplus, and total welfare. Represent the Nash equilibrium on a best-response function diagram. Show how a reduction in firm 1’s cost would change the equilibrium. Draw a representative isoprofit for firm 1.Question 3 Assume we have a market with only two companies in it, Company X and Company Y. Now suppose that both companies have to choose one of two potential strategies for pricing their products: setting a low price or setting a high price. The table below shows the expected profits for each company under each pricing scenario. Assume both companies are in competition with each other and seek to maximize their profits. Under these conditions, how much profit should we expect both companies to earn? Company Y Provide your answer below: High Price Low Price High Price Profit for Company Y: $12, 975,000 Profit for Company X: $12, 975,000 Profit for Company Y: $16, 218,000 Profit for Company X: $1,946, 000 Company X Low Price Profit for Company Y: $1,946, 000 Profit for Company X: $16, 218,000 Profit for Company Y: $6,487,000 Profit for Company X: $6,487,000Consider the following game. Firm 1, the leader, selects an output ?1, after which firm 2, the follower, observes the choice of ?1 and then selects its own output ?2. The resulting price is one satisfying the industry demand curve ? = 200 − ?. Both firms have zero fixed costs and a constant marginal cost of 60. Determine the equilibrium output of each firm in the leader-follower game. What are firm 1’s profits in the equilibrium?
- Suppose that two clothing manufacturers, Lands’ End and L.L. Bean, are deciding what price to charge for very similar field coats. The cost of producing these coats is $100. The coats are very close substitutes, so customers flock to the seller that offers the lowest price. If both firms offer identical prices, each receives half the customers. For simplicity, assume that the two firms have the choice of pricing at prices of $103, $102, or $101. The profit each firm would earn at various prices (Lands’ Ends Profit, LL Bean’s Profit) is attached in the payoff matrix below: a.) What is the Nash equilibrium and expected profits to LL Bean and Lands’ End of this game? b.) Suppose this is a mixed strategy game in which LL Bean has a 25% percent chance of choosing a priceof $101, a 25% chance of choosing price of $102, and a 50% chance of choosing $103, while Lands End has a1/3 chance of choosing each strategy. What’s the expected payoff to LL Bean? c.) Suppose that in hopes of raising…The payoff matrix in the figure to the right shows the payoffs for a pricing game. If you were firm A, which strategy would you choose? Firm A should A. price high because this is their maximin strategy. B. price low because this is their tit-for-tat strategy. C. price high because this is their dominant strategy. D. price low because this is their dominant strategy. E. price low because this maximizes profits of both firms. Firm B's dominant strategy is to price If this game were repeated a large number of times and you were firm A and you could change your strategy, what might you do? Firm A should O A. use a tit-for-tat strategy by responding in kind to firm B's play. B. use a maximin strategy by maximizing the minimum gain that can be earned. C. use a tit-for-tat strategy by selecting a price that minimizes firm B's profits. D. use a maximin strategy by by responding in kind to firm B's play. E. use a tit-for-tat strategy by maximizing the minimum gain that can be earned. C Price…Consider the payoff matrix below representing two firms engaged in Bertrand Competition. Firm A is player 1 and Firm B is player 2. High price Low price High price 10, 12 -1, 13 Low price 12, 2 0, 3 What is Firm A's dominant strategy? Question 14Answer a. High price b. Low price c. Firm A does not have a dominant strategy
