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.
Q: 12 The City of Wilsonville is adding 10 New natural gas busses The cost of the busses with…
A: The benefit-cost ratio is the ratio of the present value of all the benefits and all the costs which…
Q: According to the Phillips curve, a recession will cause Select one: O a. The inflation rate to…
A: Phillips curve defines the stable and inverse relationship between the unemployment and the…
Q: The graph below shows the labour market for Lumberland Wage rate (hourly) 16 14 12 10 8 6 9.75 10.00…
A: Labour market : labour market is a market where the firms and households interacts. The firms…
Q: Consider the following sequential variant of the public goods game we studied in class. Sup- pose…
A: When the game is sequential consisting of two players , then the first player optimizes his utility…
Q: d) Refer to Table 8.2. If Sherry produces five pairs of earrings, what are her total costs? Show…
A: Total cost is the sum of fixed cost and variable cost. Fixed cost is the cost that incurs even at…
Q: Refer to the figure below to answer the following questions. Price (millions of dollars per…
A: The market equilibrium condition for helicopters in Canada is when the domestic demand curve is…
Q: If planned aggregate expenditure equals GDP, the economy is in macroeconomic equilibrium. True False
A: An economic equilibrium exists when economic forces are in balance. Economic variables essentially…
Q: (b) A project with an infinite life has the following details: Initial cost = $6 million Annual…
A: A capitalized cost is an expense added to the cost basis of a fixed asset on a company's balance…
Q: The covariance by itself is not very useful because ___________.
A: Covariance is a measure that depicts the relationship of two variables when they changes. There is…
Q: Choose all true statements on the saving, investment and loanable funds market in a closed economy.…
A: In the loanable fund market, the interest rate and the quantity of lonable fund is determined by the…
Q: FORMULAS: Present Value of $X T-years in the future if the interest rate is 1% per year SX PV = (1+)…
A: The present value (p) of a future payment (F) received after n years at theinterest rate of r% is…
Q: Phelps was suspicious of the tradeoff suggested by the Phillips curve. He thought that sensible,…
A: Disclaimer- “Since you have asked multiple question, we will solve the first three question for you…
Q: If nco>0 greater than zero do we say nco is positive? When we way nco>0 means that we have…
A: DISCLAIMER “Since you have asked multiple questions, we will solve the first three questions for…
Q: If the multiplier is 10, the marginal propensity to consume must be 0.1. True False
A: The multiplier could be measured by using the following formula: Multiplier (k) =11-MPC Given,…
Q: As in the lemons model, suppose that there is one seller and one buyer who may exchange a good of…
A: Lemon model: 1 seller, 1 buyer Value of good for seller = v Value of good for buyer = 3v/2 Fixed…
Q: Which of the following is true of a natural monopoly? A The firm is not protected by any barrier to…
A: In a monopoly market, there are high barriers to entry. A firm experiences economies of scale when…
Q: calculate Net Present value and Annual worth using the cash flow diagram below. inflation corrected…
A: In the cash flow diagram, the receipts are denoted by upward arrows, and expenses is denoted by…
Q: d) At equilibrium, what is the level of saving in Peru? Show your work. On a separate graph, draw…
A: Given that: C = 400 + 0.6Yd T = 600 Equilibrium Output= 4000
Q: An open-economy is characterized by the following: C = 800+ 0.8 (Y-T) I = 2400 G = 200 T = 100 X =…
A: In an open economy, aggregate expenditure is the sum of consumption, investment, government spending…
Q: Suppose the economy is producing below the natural rate of output and the government is suffering…
A: Fiscal policy is monitored and implemented by the government of a nation. The tools of fiscal policy…
Q: Question 2 if there is a monopsony, how is the wage for workers decided? a. one firm decides, to…
A: A monopsony occurs when there is just one consumer who regulates the market, sets the price, and…
Q: The following graph plots a short-run Phillips curve for a hypothetical economy. Show the short-run…
A: The Phillips curve depicts the correlation between the unemployment rate and the rate of inflation.…
Q: Is the open economy IS-LM model, describe the effects of fiscal and monetary contractions with fixed…
A: Here we are discussing about the impact of the fiscal and monetary policy under the fixed and…
Q: Which one of the following statements is TRUE? Select one: O a. The more extensive are factor…
A: Exchange rate: Exchange rate plays a vital role in determining the economic wealth for a country. A…
Q: In early 2017, fidget spinners, dubbed the "hula hoop of Gen Z," took the market by storm.…
A: The demand for a product depends on various factors such as the price level of products, relative…
Q: A project costs $100,000.00. The benefit at the end of each year for a period of 5 years is equal to…
A: B-C ratio is the benefit to cost ratio. It is calculated as the annual worth of benefit divided by…
Q: You finish your engineering degree with $17,350 in student loans. The interest rate on your loans…
A: Since you have asked multiple questions, we are answering only the first question for you. To get…
Q: Which of the following statements is correct? a. In the special case of 100-percent-reserve…
A: Reserve are the part of deposit that is kept out of the deposit by the bank. Reserve ratio shows…
Q: . what is the per effective worker production function for these countries? b . what is the…
A:
Q: An open-economy is characterized by the following: C = 750+ 0.8 (Y-T) $$1-1500$$ G = 250 1. 2. T =…
A: Aggregate demand is the sum of consumption, investment, government spending and net export. So, AD…
Q: Which of the following statements are correct? Select all that apply. Economic development may…
A: Economic development is the process by which low-income, underdeveloped country economies are…
Q: Maharaja Samosa produces samosas. The market for samosas is perfectly competitive, and the price is…
A: Perfect competitive market refers to a market in which there are many number of buyer and sellers…
Q: Use this information for questions 19-22. Consider the Acid Rain Game with new payoffs below. Total…
A: Grim trigger is a trigger strategy for a recurrent game in game theory. A player utilising grim…
Q: In the aggregate demand-supply model, a short-run equilibrium occurs at the combination of output…
A: Aggregate demand is the sum of Consumption, Investment, government spending and net export. Long…
Q: The Federal Reserve does not target both the money supply and an interest rate because it would be…
A: The Federal Reserve has many tools and policies to use when their in instability in the economy in…
Q: Real GDP $2,000 2,500 3,000 3,500 Consu mption $1,600 2,000 2,400 2,800 Planne d Invest ment $250…
A: The formula to calculate the GDP is given by: Y = C+I+ G+ NX Where Y is the GDP, C is the…
Q: 3 mutually exclusive projects A, B, C. What will be selected? Project Capital (mil.) NPV (mil.) A 1…
A: Present value is the value of investment in today's dollar. Future value is the value of investment…
Q: Which of the following is true if good x is an externality exhibiting good.
A: Good x is an externality exhibiting good and hence the externality can be either positive or…
Q: How does contractionary monetary policy affect net exports in the short run? Contractionary monetary…
A: Contractionary monetary policy refers to the economic policy in which Central Bank reduces money…
Q: Demand factors that lead to increase in the real interest rates are: A) A major breakthrough in…
A: When the demand of a good rises , the situation of excess demand arises in the market which…
Q: Only Keynesian economics argues for active macroeconomic policy. True False
A: The functionality of the economy as a whole is a concern of macroeconomic policy.Macroeconomic…
Q: Q5. Poverty measures a. The Poverty Gap Index or Normalized Poverty Gap is the Average Poverty Gap…
A: Since you have posted a question with multiple sub parts, we willprovide the solution only to the…
Q: What should we infer when our models make predictions that are not reflected in the world? Obviously…
A: Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: What will be the break-even sales amount for a marketing operation that sells 615 units of products…
A: The break-even price is the price that will make enough revenue to cover all costs at a provided…
Q: question in fewer than 500 words: Please name 3 things about our current economic system you would…
A: The current economic scenario is ridden with a lot of defeciencies such as rising Unemployment,…
Q: Question 6 Refer to Scenario 3.3 below to answer the question(s) that follow. SCENARIO 3.3: -Mustard…
A: In the free market, the equilibrium price and quantity is determined by the forces of demand and…
Q: Ceteris paribus, how does a recession in the United States affect U.S. net exports?
A: Recession refers to the business cycle during which the prices of the goods and services comes down.…
Q: Domestic producers gain P/$ 25 15 10 because of the tariff. O a $50,000 O b. $75.000 O c. $150,000…
A: A tariff is a kind of tax or duty imposed by the government on imports or exports of goods in order…
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
- 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 strategyProblem II. Suppose a small town has only two firms (firm1 and firm 2) selling the same product. Each firm can either set a high price (H) or a low price (L) for its product. The payoff matrix below displays the profits per day given the combination of prices for both firms. The first entry shows firm1’s profits while the second entry shows the second firm’s profits. The information displayed in the playoff matrix are known by both firms. Firm 2 High price Low Price Firm 1 High price $210; $220 $80; $260 Low Price $240; $160 $150; $140 Does each firm have a dominant strategy to set a high price, a dominant strategy to set a low price, or does it have no dominant strategy? In other words, find the dominant strategy of each firm, if it exists. Explain your answer. Assuming that the two firms do not cooperate to set prices, what will be the profits of each firm? The local authorities of the…Exercise 6.7. Suppose two identical companies produce wood stoves and they are the only ones on the market. Its costs are given by: C1 (q1 )=200q1 and C2 (q2) = 200q2. And the inverse market demand curve is: P=2000-2Q, where Q =q1 + q2 Get the Cournot-Nash equilibrium. Calculate the profits of each company. Show graphically. Suppose that the two companies form a cartel to maximize joint profits. How many stoves will you produce? Calculate the profits of each company. Represent graphically. Managers now note that explicit agreements to collude are illegal. Each company must decide on its own whether to produce the amount of Cournot or that of the cartel.
- 4)The result with unspecified N firms can be applied to N approaching infinity. Q2) Which of the following statements about the classic Cournot duopoly model is incorrect? 1)The products of the two firms are homogeneous. 2)It is a static game with complete information. 3)The two firms decide on their prices and let their quantities be dictated demand conditions. 4)There exist examples that have unique Nash equilibrium pointsCalculate the Herfindahl index for a duopoly market where each firm has equal market. Calculate the Herfindahl index for a three-firm oligopoly market in which one firm hasa 80% market share and the other firms each have 10% market share. iii. Calculate the Herfindahl index for a 10-firm oligopoly in which each firm has equal market shares. iv. Which of the above markets is the least competitive? Justify your position.Q1. Which is which? Identify the oligopoly model based on the description. Two Firms, high barriers to Entry, Firms sell identical goods, Firms simultaneously choose output______(a. Cournot Duopoly b. Monopolistic Duopoly c. Bertrand Duopoly d. Stackelberg Duopoly) Two Firms, high barriers to entry, Firms sell identical goods, Firms simultaneously choose prices______(a. Stackelberg Duopoly b. Bertrand Duopoly c. Hotelling Duopoly d. Cournot Duopoly) Few Firms, low barriers to entry, firms sell substitutes but differentiated goods______(a. Monopolistic Competition b. Bertrand Oligopoly c. Bertrand Competition with Differentiated Goods d. Cournot Oligopoly) Two firms, high barriers to entry, firms sequentially choose output______(a. Stackelberg Duopoly b. Bertrand Duopoly c. Cournot Duopoly d. Monopolistic Competition)
- (Table: Samsung and Apple’s Payoff Table) Suppose that a market is dominated by two large firms, Samsung and Apple. Both have two choices: to Advertise or Do not advertise. The payoff table below shows the potential revenues associated with each firm’s strategies. For example, if Apple advertises and Samsung does not, the payoff to Apple is $75,000 and Samsung’s payoff is -$25,000. What are Apple and Samsung’s respective dominant strategies? Apple (right payoffs) Samsung Do not advertise Advertise Do not advertise (50000, 50000) (-25000, 75000) Advertise (75000, -25,000) (10000,10000) Group of answer choices Do not advertise, Do not advertise Advertise, Advertise Do not Advertise, Advertise Advertise, Do not Advertise8. Collusive outcome versus Nash equilibrium Consider a remote town in which two restaurants, All-You-Can-Eat Café and GoodGrub Diner, operate in a duopoly. Both restaurants disregard health and safety regulations, but they continue to have customers because they are the only restaurants within 80 miles of town. Both restaurants know that if they clean up, they will attract more customers, but this also means that they will have to pay workers to do the cleaning. If neither restaurant cleans, each will earn $12,000; alternatively, if they both hire workers to clean, each will earn only $9,000. However, if one cleans and the other doesn't, more customers will choose the cleaner restaurant; the cleaner restaurant will make $16,000, and the other restaurant will make only $4,000.2. Ryan and Zheka produce the same homogeneous product and each has constant marginal costs of \$7. Market demand is linear, with vertical intercept 60 and horizontal intercept 30. Ryan and Zheka are Bertrand competitors, so pricing is important to them. What price will each charge in the unique Nash equilibrium of this Bertrand duopoly? a) Both charge a price of \$6. b) Both charge a price of \$7. c) Both charge a price of \$20. d) One charges \$7, the other stays out of the market.
- Suppose that two firms produce mountain spring water and the market demand for mountain spring water is given as follows: P= 254 - 91 - 92 Firm 1 and Firm 2 have a MC = 50 a) Find the Cournot-Nash equilibrium price and quantity of each firm. b) Assume now that firm 1 becomes the Stackelberg leader. What will be the market price, output by each firm? Compared to part a, who gains? c) If Firm 1 chooses a quantity, then Firm 2 chooses a quantity (having observed Firm 1's quantity), then Firm 1 has an opportunity to revise its quantity (having observed Firm 2's quantity), then payoffs are determined, does either firm stand to gain relative to the case of simultaneous quantity choice? Why or why not? (hint: there is no need to do any calculation here).Continuous Strategy in Static Game: Bertrand and Cournot Model Consider the Cournot duopoly with linear demand function ? = 2000 − 2Q, where P is the price and Q = q1 + q2 is the total supply. Firm 1 and firm 2 has constant marginal cost of 600. Just answer the A, B and C, thank you bartleby! a. If firm compete in price, draw in detail the best response of each firm.b. Determine and explain the Bertrand equilibrium.c. What is the equilibrium quantity and how much profit for each firm?d. Explain the Bertrand Paradox in (c)!e. If firm 1 has capacity of production 450 and firm 2 has capacity of 200. Determine the Bertrand equilibrium.f. What is the equilibrium quantity, and how much profit for each firm?g. Is there any paradox in (f)?A homogenous-good duopoly faces an inverse market demand function of p = 150 − Q. Assume that both firms face the same constant marginal cost, MC1 = MC2 = 30. Calculate the output of each firm, the market output, and the market price in a Nash-Cournot equilibrium Re-solve part (a) assuming that the marginal cost of firm 1 falls to MC1 =20 Explain what will happen to each firm’s output, the market output, and the market price if the two firms can collude (e.g., form a cartel)
