Using the figure in the picture: 1. If firm 1 chooses to sell for $2 and firm 2 chooses to sell for $2. Determine firm 1’s profits and firm 2’s profits. Fill in those profit values in the figure above under the appropriate box 2. If firm 1 chooses to sell for $2.50 and firm 2 chooses to sell for 2.50 determine firm 1’s profit and firm 2’s profit. Fill in those profit values in the figure above under the appropriate box 3. Fill in the final two values in the figure above 4 what do you think will be the likely outcome of the market (I.e which prices will each firm choose) if firms 1 and 2 are not allowed to collude? Explain. What do you think will be the likely outcome of the market if the firms are allowed to coordinate their prices. Explain
Using the figure in the picture: 1. If firm 1 chooses to sell for $2 and firm 2 chooses to sell for $2. Determine firm 1’s profits and firm 2’s profits. Fill in those profit values in the figure above under the appropriate box 2. If firm 1 chooses to sell for $2.50 and firm 2 chooses to sell for 2.50 determine firm 1’s profit and firm 2’s profit. Fill in those profit values in the figure above under the appropriate box 3. Fill in the final two values in the figure above 4 what do you think will be the likely outcome of the market (I.e which prices will each firm choose) if firms 1 and 2 are not allowed to collude? Explain. What do you think will be the likely outcome of the market if the firms are allowed to coordinate their prices. Explain
Economics Today and Tomorrow, Student Edition
1st Edition
ISBN:9780078747663
Author:McGraw-Hill
Publisher:McGraw-Hill
Chapter7: Demand And Supply
Section: Chapter Questions
Problem 21AA
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Using the figure in the picture:
1. If firm 1 chooses to sell for $2 and firm 2 chooses to sell for $2. Determine firm 1’s profits and firm 2’s profits. Fill in those profit values in the figure above under the appropriate box
2. If firm 1 chooses to sell for $2.50 and firm 2 chooses to sell for 2.50 determine firm 1’s profit and firm 2’s profit. Fill in those profit values in the figure above under the appropriate box
3. Fill in the final two values in the figure above
4 what do you think will be the likely outcome of the market (I.e which prices will each firm choose) if firms 1 and 2 are not allowed to collude? Explain. What do you think will be the likely outcome of the market if the firms are allowed to coordinate their prices. Explain
Transcribed Image Text:Firm 1
Sell for $2.50 Sell for $2
Sell for $2
Firm 2's profit:
Firm 1's profit:
Firm 2's profit:
Firm 2
(Un
Sell for $2.50
Firm 2's profit:
Firm 1's profit:
Firm 2's profit:
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Firm 1's profit:los Firm 1's profit:
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