3. What is collusion? Does it have positive implications in the economy. Discuss your answer.

The market structure can be divided into four based on the degree of comeptition and the type of…

Answered: What is collusion? Does it have…

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter15A: Auction Design And Information Economics

Section: Chapter Questions

Problem 2.1CE

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Examine the concept of collusion and investigate the differente types of collusion that exist.
Why is collusion or coordination (such as cartels) not prevalent in the United States and other developed countries?
2. Film producer S costs c=20 to produce one film. B, an online movie distributor, earns v=120 if the movie is distributed. In order for B to distribute the movie, it must be purchased from S. If there is no transaction between S and B, each earns a profit of zero. Find the sum of S's profit and B's profit by the transaction price formed when S and B's bargaining power is 50:50.
What Is Win-Win Negotiation?
A 1st attempt Which of the following are examples of collusion? Choose one or more: A. The two firms in a small rural town that employ most of the people in that area agree to keep wages low. B. The two leading cell phone manufacturers apply the same new technology, which increases productivity for both. C. All the gas stations along the Gulf coast increase their prices after a hurricane devastates communities near the water. D. Three major airlines meet to discuss pricing strategy and as a result prices for airplane tickets rise. E. The menu prices at restaurants in New Buffalo, Michigan, a small lakeside town, increase during the summer months and decline starting November 1.
Discuss the formation of collusion. Why is it beneficial for firms? What is the main observed problems of collusion? You can use graph in your answer.
Consider trade relations between the United States and Mexico. Assume that the leaders of the two countries believe the payoffs to alternative trade policies are as follows a. What is the dominant strategy for the United States? For Mexico? Explain. b. Define Nash equilibrium. What is the Nash equilibrium for trade policy? c. In 1993, the U.S.Congress ratified the North American Free Trade Agreement, in which the United States and Mexico agreed to reduce trade barriers simultaneously. Do the perceived payoffs shown here justify this approach to trade policy? Explain. d. Based on your understanding of the gains from trade (discussed in Chapters 3 and 9), do you think that these payoffs actually reflect a nation's welfare under the four possible outcomes?
QUESTION 3 Smalltown has 140 residents and two mobile phone providers: Verizon and AT&T Each firm's costs: FC = $0, MC = $10. Assume the two firms collude, how much profit does each make if they share it equally? P Q TR TC Profit 45 50 40 60 35 70 30 80 25 90 20 100 15 110 10 120 5 130 0 140 O Q = 30, P = $40, profits = $900 Q = 40, P = $30, profits = $800 Q = 60, P = $10, profits = $0 Q =25, P = $45, profits = $875
Pirates of the Caribbean When Spain colonized the New World, they extracted untold riches from there to finance their wars in Europe. The gold and silver had to be transported back to Europe on ships and these were attractive targets for pirates and privateers from other countries. Imagine the fictional Capitano Juan Barcodoro, who is in Cartagena and has to bring his cargo safely back to Sevilla, but he knows that the ruthless French pirate François Dragon is lurking. He can sail one of two routes: following the coast to Trinidad or go for Santo Domingo on Hispaniola. The pirates have to decide where they try to intercept him. Barcodoro is on the left and François Dragon on top, and their payoffs are on the left/right. Juan François Trinidad Hispaniola 5/-2 Trinidad -8/6 Hispaniola 2/-3 -8/7 What is Barcodoro's best response if he believes the pirates are at Trinidad? What if he believes they are at Hispaniola? Also find the pirates' best responses. Is there a Nash equilibrium in pure…
Кееp production $200 million $300 million Using what you know about the prisoner's dilemma, what would be the profit for Antel and constant IMD in millions? (cooperate Antel profit Antel profit is $20 million is $200 million Antel options IMD profit is IMD profit is $20 million $100 million Increase production (act independently) Antel profit Antel profit is $100 million is $300 million Antel profit: S million million IMD profit: S What would be the best collective option for both firms? Select all of the reasons Antel and IMD would make more profit at the original constant production level? соорerate Because overall demand for computer chips act independently will increase Because they can both charge more for the product at the given level of production Because it restricts the supply of computer chips
Why do authorities in most countries have laws and regulation to prevent collusion?
please only do: if you can teach explain each part

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