LSC CUMBERLAND EC202 MICRO>PKG<
21st Edition
ISBN: 9781260586992
Author: McConnell
Publisher: MCG
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Question
Chapter 14, Problem 3DQ
Sub part (a):
To determine
Oligopoly payoff matrix.
Sub part (b):
To determine
Oligopoly payoff matrix.
Sub part (c):
To determine
Oligopoly payoff matrix.
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Rawlding is a manufacturer in the oligopolistically competitive market for footballs. Two other manufacturers, Spaldon and Wilke, compete with
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producing and selling 7 million footballs per year.
PRICE (Dollars per ball)
36
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34
33
32
31
30
29
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27
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O
7
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by million footballs per year. (Hint: Click on the points on the graph to see their coordinates.)
footballs demanded
If Rawlding raises the price of its football above $30, the kinked demand curve model suggests that Spaldon and Wilke will respond by
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Consider an oligopolistic market with 5 identical firms that choose their profit-maximizing quantities simultaneously. Suppose each firm has constant
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What is the change in the prevailing market price if one additional firm joins the market? Assume that the potential entrant is identical to the incumbent
firms.
O A. -7.71
O B. - 5.51
O C. -9.92
O D. - 6.89
QUESTION 4
If Bertrand duopolists respectively have marginal costs of 10 (firm 1) and 8 (firm 2), which of the prices below can arise in Nash equilibrium?
(Assume that prices must be quoted in full cents, e.g. $0.99 or $1, but $0.995 is not possible. If prices are equal, half of the customers buy from
each firm.)
O Both firms charge $8.01.
Firm 1 charges $10 and firm 2 charges $8.
Both firms charge $9.
Firm 1 charges $10 and firm 2 charges $9.99.
Chapter 14 Solutions
LSC CUMBERLAND EC202 MICRO>PKG<
Ch. 14.2 - Prob. 1QQCh. 14.2 - The D2e segment of the demand curve D2eD1 in graph...Ch. 14.2 - Prob. 3QQCh. 14.2 - Prob. 4QQCh. 14 - Prob. 1DQCh. 14 - Prob. 2DQCh. 14 - Prob. 3DQCh. 14 - Prob. 4DQCh. 14 - Prob. 5DQCh. 14 - Prob. 6DQ
Ch. 14 - Prob. 7DQCh. 14 - Prob. 8DQCh. 14 - Prob. 9DQCh. 14 - Prob. 10DQCh. 14 - Prob. 11DQCh. 14 - Prob. 12DQCh. 14 - Prob. 13DQCh. 14 - Prob. 14DQCh. 14 - Prob. 1RQCh. 14 - Prob. 2RQCh. 14 - Prob. 3RQCh. 14 - Prob. 4RQCh. 14 - Prob. 5RQCh. 14 - Prob. 6RQCh. 14 - Prob. 7RQCh. 14 - Prob. 8RQCh. 14 - Prob. 9RQCh. 14 - Prob. 10RQCh. 14 - Prob. 1PCh. 14 - Prob. 2PCh. 14 - Prob. 3P
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- Suppose that there are two firms producing a homogenous product and competing in Cournot fashion and let the market demand be given by Q = 240- Assume for simplicity that each firm operates with zero total cost. Find each firm's Cournot Nash equilibrium profit for each firm. $21600 O $19200 O $18000 O $16000arrow_forwardWhile there is a degree of differentiation between major grocery chains like Albertsons and Kroger, theregular offering of sale prices by both firms for many of their products provides evidence that these firmsengage in price competition. For markets where Albertsons and Kroger are the dominant grocers, thissuggests that these two stores simultaneously announce one of two prices for a given product: a regularprice or a sale price. Suppose that when one firm announces the sale price and the other announces theregular price for a particular product, the firm announcing the sale price attracts 1000 extra customers toearn a profit of $5000, compared to the $3000 earned by the firm announcing the regular price. Whenboth firms announced the sale price, the two firms split the market equally (each getting an extra 500customers) to earn profits of $2000 each. When both firms announced the regular price, each companyattracts only its 1500 loyal customers and the firms each earned $4500 in…arrow_forwardWhat is a feature common to both Monopolistic-Competition and Oligopoly type of markets? O productive efficiency will occur in both the short run and long run, a desirable economic property of markets. many smaller sized firms can produce the good or service at lower cost per unit than larger sized firms, thus large firms fail in the long run. the demand curve for each firm is not going to be purely elastic, because products are at least slightly different than potential rival firms' product and/or there may be some consumer brand loyalty. Firms in both types of markets eventually will be broken up by government anti-trust laws and regulations. MacBook Pro く※ G Search or type URL 6 7 8. 3 4. W Earrow_forward
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