a)Suppose that the two firms collude and set prices to maximize their joint profits instead of playing the Nash equilibrium. Suppose that the locations are symmetrically locates at a and 1−a. What prices would the firm set if it acts like a monopolist ? (b) If the firm colludes, where will it locate its two establishments?
a)Suppose that the two firms collude and set prices to maximize their joint profits instead of playing the Nash equilibrium. Suppose that the locations are symmetrically locates at a and 1−a. What prices would the firm set if it acts like a monopolist ? (b) If the firm colludes, where will it locate its two establishments?
Micro Economics For Today
10th Edition
ISBN:9781337613064
Author:Tucker, Irvin B.
Publisher:Tucker, Irvin B.
Chapter13: Antitrust And Regulation
Section: Chapter Questions
Problem 5SQP
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(a)Suppose that the two firms collude and set prices to maximize their joint profits instead of playing the Nash equilibrium. Suppose that the locations are symmetrically locates at a and
1−a. What prices would the firm set if it acts like a monopolist ?
(b) If the firm colludes, where will it locate its two establishments?
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