Figure Firm 2 Left Right Up 1,7 0,6 Firm 1 Down 0,2 -1,2 Using the above Figure, use iterated elimination of strictly dominated strategies. Which of the following is the unique equilibrium? O (Up, Right) ○ (Up, Left) ○ There is no unique equilibrium. (Down, Left) O(Down, Right)
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- Exercise A.2 . Sinergy and Dinaco are the only two companies in a high-tech industry. They are faced with the following matrix of results when deciding their research budget: After analizing the graph, answer the following questions... a) Does Sinergy have a dominant strategy? Reason your answer. b) Does Dinaco have a dominant strategy? Reason your answer. c) Is there a Nash equilibrium in this scenario? Reason your answer.It takes 3,000 households having average annual income of $50,000 within a 3-mile radius to support a grocerystore. There are actually 6,000 households within 3-miles of the Shop-Rite Grocery that have $50,000 per yearaverage incomes. Today, Shop-Rite is the only grocery store in this area. Using the concept of Nash Equilibrium inlocation, explain what the likely outcome will be for this area, given those conditionsConsider a market with two identical firms, Firm A and Firm B. The market demand is:1P = 100 — —2Qwhere Q = QA + QB . The cost conditions are MCA = MC, = ACA = AC, = 24. (Hint: Round your solutions to 2 decimal places.)Assume this market has a Stackelberg leader, Firm A. Solve for the quantity, price and profit for each firm. Explain your calculations.How does this compare to the Cournot-Nash equilibrium quantity, price and profit? Explain your calculations.
- Fill in the chart attached and answer the following questions: a) Bert's dominant strategy is to: (pick the correct answer below ) - no dominant strategy - fish for 20 hours per week -fish for 40 hours per week. b) Ernie's dominant strategy is to: ( pick the correct answer below) - no dominant strategy - fish for 20 hours per week -fish for 40 hours per week. c) Is there a Nash Equilibrium? ( pick the correct answer below) - No - Yes, both fish for 20 hours per week - Yes, one fisher for 40 and the other for 20. - Yes both fish for 30 hours per week. d) Is there an incentive for Bert and Ernie to collude? Why or why not?Joe and Rebecca are small-town ready-mix concrete duopolists. The market demand function is Qd = 10,000 – 100P, where P is the price of a cubic yard of concrete and Qd is the number of cubic yards demanded per year. Marginal cost is $25 per cubic yard. Suppose that Joe and Rebecca compete in quantities and competition in this market is described by Cournot model. What are Joe and Rebecca’s Nash equilibrium outputs? What is the resulting price? What do they each earn as profit? How does the price compare to the marginal cost? Joe and Rebecca are small-town ready-mix concrete duopolists. The market demand function is Qd = 10,000 – 100P, where P is the price of a cubic yard of concrete and Qd is the number of cubic yards demanded per year. Marginal cost is $25 per cubic yard. Suppose that Joe and Rebecca compete in quantities and competition in this market is described by Cournot model. What are Joe and Rebecca’s Nash equilibrium outputs? What is the resulting price? What do they each…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).
- Consider two firms in the Australia market. The table below depicts each firm’s profits, depending on what price both firms charge. a. Find (if any) each firm's dominant strategy. b. Which strategy does each firm choose in equilibrium when collusion (joint agreement) is not allowed? c. Suppose that collusion is allowed between the two firms. Could these firms benefit from collusion? Why or why not?Two firms produce the samecommodity, both with zero cost. The demand for this commodity is D(P) = 100−P.The two firms can each produce at most 50 units. They compete on price andrationing is efficient: if pi < pj then the demand that j faces is Dj(p) = D(pj) − qi,where qi is the quantity supplied by firm i. That is, the lower price firm gets to sellfirst. Is the price list p = (p1, p2) = (0, 0) a Nash equilibrium? Prove your assertion.Please no written by hand and no emage Consider the following Stackelberg duopoly. Both firms produce a homogenous good. Firm 1 chooses how much to supply first. Firm 2 chooses how much to supply after observing the quantity supplied by firm 1. The market demand is Q = 100 - 10P. For firm i, the total cost of production is TC (q) = 5q₁. In a Subgame Perfect Nash Equilibrium, how much does firm 2 produce?
- Using your own words, explain how the concept of elimination of dominated strategies differs from the concept of Nash equilibrium.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.How do I determine values for Y that have dominant strategy? What is the Nash equilibirum? If the Market demand for two companies is P=120-Q and marginal cost is 20. How will the payoff matrix with strategies for each that show cournot equilibirum quantity/half of the monopoly quantity look? How do i solve for the nash equilibrium?
