Use the following information to complete the payoff matrix on the right. Quantity: firm 1 Quantity: firm 2 Condition Price Both firms enter 4 11 11 Only firm 1 enters 18 Only firm 2 enters 6 18 The firms have the following identical cost function: C(q) = 29 + 25 if q >0, or zero if q = 0. There is room for two firms in this market if they play a mixed-strategy Nash equilibrium.
Use the following information to complete the payoff matrix on the right. Quantity: firm 1 Quantity: firm 2 Condition Price Both firms enter 4 11 11 Only firm 1 enters 18 Only firm 2 enters 6 18 The firms have the following identical cost function: C(q) = 29 + 25 if q >0, or zero if q = 0. There is room for two firms in this market if they play a mixed-strategy Nash equilibrium.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
1
![Use the following information to complete the payoff matrix on the right.
Each cell contains payoffs for Firm 2, Firm 1.
Quantity:
firm 1
Quantity:
firm 2
Firm 1
Condition
Price
Enter
Not enter
Both firms enter
4
11
11
Only firm 1 enters
Only firm 2 enters
18
Enter
6
18
Firm 2
The firms have the following identical cost function:
Not enter
C(q) = 2q + 25 if q> 0,
or zero if q = 0.
There is room for two firms in this market if they play a mixed-strategy Nash equilibrium.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F20b69cc5-63a6-4906-b55a-6faf099a0d30%2F4ba39bc4-878b-4816-8982-3485e5821386%2Fdz3kz4j_processed.png&w=3840&q=75)
Transcribed Image Text:Use the following information to complete the payoff matrix on the right.
Each cell contains payoffs for Firm 2, Firm 1.
Quantity:
firm 1
Quantity:
firm 2
Firm 1
Condition
Price
Enter
Not enter
Both firms enter
4
11
11
Only firm 1 enters
Only firm 2 enters
18
Enter
6
18
Firm 2
The firms have the following identical cost function:
Not enter
C(q) = 2q + 25 if q> 0,
or zero if q = 0.
There is room for two firms in this market if they play a mixed-strategy Nash equilibrium.
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