10. A A and B are two firms who have a simultaneous strategic problem modeled in this table: Q=3 Q=4 Q=5 O=6 Q=3 (0.7, 0.7) (1.8, 0.1) (2.5, -0.5) (2.8,-1.1) Q=4 (0.1, 1.8) (1.0, 1.0) (1.5, 0.2) (1.6,-0.6) B O=5 (-0.5, 2.5) (0.2, 1.5) (0.5, 0.5) (0.4, -0.5) Q=6 (-1.1, 2.8) (-0.6, 1.6) (-0.5, 0.4) (-0.8,-0.8) Profits are in the form (A,B) Describe the Nash Equilibrium strategies for A and B and the resulting total production and profit levels. Show your work in determining the Nash Equilibrium so that I know that your answer is not a guess.

10. A A and B are two firms who have a simultaneous strategic problem modeled in this table: Q=3 Q=4 Q=5 O=6 Q=3 (0.7, 0.7) (1.8, 0.1) (2.5, -0.5) (2.8,-1.1) Q=4 (0.1, 1.8) (1.0, 1.0) (1.5, 0.2) (1.6,-0.6) B O=5 (-0.5, 2.5) (0.2, 1.5) (0.5, 0.5) (0.4, -0.5) Q=6 (-1.1, 2.8) (-0.6, 1.6) (-0.5, 0.4) (-0.8,-0.8) Profits are in the form (A,B) Describe the Nash Equilibrium strategies for A and B and the resulting total production and profit levels. Show your work in determining the Nash Equilibrium so that I know that your answer is not a guess.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter15: Oligopoly And Strategic Behavior

Section: Chapter Questions

Problem 15P

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