I need the answer of part b). Thank you. (b) At the end of each period, the market ceases to exist with prob-ability y. Consider an infinitely repeated Bertrand oligopoly game with dis-count factor d < 1. The unit cost of production is a constantc = 0.2 and the same for all n > 2 firms. There are no fixed costs.Describe a form of "trigger" strategies that can facilitate tacit collu-sion in pricing. Determine the condition under which such strategiescan sustain the monopoly price in each of the following cases:(a) The market demand in each period is D (p) = 1–p. (Calculatethe monopoly price and profit explicitly in your answer.)

In this case, there is an exogenous probability that γ ∈ (0,1) that the market will end after each…

Answered: (b) At the end of each period, the…

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(b) At the end of each period, the market ceases to exist with prob- ability y.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter15: Imperfect Competition

Section: Chapter Questions

Problem 15.6P

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