EP ECONOMICS,AP EDITION-CONNECT ACCESS
20th Edition
ISBN: 9780021403455
Author: McConnell
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Chapter 13.A, Problem 2ADQ
To determine
How monopolistic competition differs from pure competition.
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Wal-Mart's dominant strategy is to pick a price of $.
Target
Price = $30
Price = $17
%3D
What is the Nash equilibrium for this game?
$6,000
$1,500
O A. The Nash equilibrium is for Target to choose a price of $17 and Wal-Mart to choose
a price of $30.
Price = $30
$6,000
$11,000
O B. The Nash equilibrium is for Target and Wal-Mart to both choose a price of $30.
Wal - Mart
C. The Nash equilibrium is for Target to choose a price of $30 and Wal-Mart to choose
a price of $17.
$11,000
$4,500
Price = $17
%3D
$1,500
$4,500
O D. The Nash equilibrium is for Target and Wal-Mart to both choose a price of $17.
South
OE.
O E. A Nash equilibrium does not exist for this game.
Team 2 plays A Team 2 plays B
Team 1 plays A
0, 24
10, 10
Team 1 plays B
4, 4
24, 0
Consider the infinitely repeated version of the game above. Which of the following is
the smallest discount factor such that the grim trigger strategy under which team 1
plays A and team 2 plays B until a team deviates, after which team 1 plays B forever
and team 2 plays A forever is a Nash Equilibrium?
O 1/2
O3/4
O 1/100
Chapter 13 Solutions
EP ECONOMICS,AP EDITION-CONNECT ACCESS
Ch. 13.1 - Prob. 1QQCh. 13.1 - Prob. 2QQCh. 13.1 - Prob. 3QQCh. 13.1 - Prob. 4QQCh. 13.4 - Prob. 1QQCh. 13.4 - The D2e segment of the demand curve D2eD1 graph...Ch. 13.4 - Prob. 3QQCh. 13.4 - Prob. 4QQCh. 13.A - Prob. 1ADQCh. 13.A - Prob. 2ADQ
Ch. 13.A - Prob. 3ADQCh. 13.A - Prob. 4ADQCh. 13.A - Prob. 1ARQCh. 13.A - Prob. 2ARQCh. 13.A - Prob. 3ARQCh. 13.A - Prob. 1APCh. 13.A - Prob. 2APCh. 13 - Prob. 1DQCh. 13 - Prob. 2DQCh. 13 - Prob. 3DQCh. 13 - Prob. 4DQCh. 13 - Prob. 5DQCh. 13 - Prob. 6DQCh. 13 - Prob. 7DQCh. 13 - Prob. 8DQCh. 13 - Prob. 9DQCh. 13 - Prob. 10DQCh. 13 - Prob. 11DQCh. 13 - Prob. 12DQCh. 13 - Prob. 13DQCh. 13 - Prob. 1RQCh. 13 - Prob. 2RQCh. 13 - Prob. 3RQCh. 13 - Prob. 4RQCh. 13 - Prob. 5RQCh. 13 - Prob. 6RQCh. 13 - Prob. 7RQCh. 13 - Prob. 8RQCh. 13 - Prob. 1PCh. 13 - Prob. 2PCh. 13 - Prob. 3P
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- 5. The following represents the payoffs in a one period game in prices HI and LO. A HI LOW B HI (100, 100) (200,0) LOW (0, 200) (50, 50) (a) If A and B were playing this game only once, what strategy should A choose, and why? (b) A and B are playing the same game an infinite number of times and each has a discount rate of 50% (.50). Firm B adopts a trigger strategy and selects HI in the first round. What would be A's present value of profits from cooperation (HI)? What would be its present value from cheating (LO)? Would A choose to cooperate or cheat?arrow_forwardConsider a new card game between 2 players: Michael (player 1) and Phyllis (player 2) Michael is dealt two cards : O7 and 8. Phyllis is also dealt two cards: 09 and 10. Now, each of the players will play 1 card both at the same time. The payoff of Michael is 8 points if he plays a card of opposite color (red/black) than Phyllis, and otherwise his payoff is 10 points. The payoff of Phyllis is 1 points if the difference of the already played card numbers is smaller than 4, otherwise her payoff is 5 points. 1. Find the action sets of each player and the action profile of the game. 2. Represent the game in the Normal form. 3. Find the Best Responses for Michael. 4. Find the Best Responses for Phyllis. 5. Find all the Nash Equilibriums of the game (if any).arrow_forwardQUESTION 8 Player 1 chooses between Up and Down. Player 2 observes this, then chooses between Up and Down herself. If both players choose the same action, they both get a payoff of 1. If they choose different actions, the player with Up gets 1 and the player with Down gets -1. How many (pure strategy) Nash equilibria are there in this game? O 3 O 4 QUESTION 9 In the Bertrand model, suppose that each firm has a marginal cost of £10 and that firm 1 sets a price of £9.99, which of the following a best-response for firm 2? Click all the correct answers. O £9.99 O £10.01 O £11.01 O £10.00 O £9.98 QUESTION 10 In the Lindahl model, if player 1 is honest and player 2 maximises his utility which of the following is true: O Player 2 has a higher utility than if both players had been honest. O The level of public good provided is more than that implied by the Samuelson rule. O Player 1 consumes more public goods than player 2.arrow_forward
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