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Yoo-Shin KohAlina Cruz8/9/2019Assignment 03.11: OligopolyFRQ #1 – 3/6 Points1)2/2a.1 Point: Stated that north will be better for Blue Martb.1 Point: Explained that Blue Mart earns a higher profit by locating north than itdoes by locating south ($4,000 versus $1,000)2)0/2a.Lost 2 Points: Student answer said that the Red Shop choosing south is adominant strategy, but that is incorrect. Choosing south is not a dominantstrategy because if Blue Mart chooses south, Red Shop is better off whenchoosing north. Therefore, the student’s answer is incorrect.3)0/1a.Lost 1 Point: Red Shop should choose south while Blue Mart should choose northbecause Red Shop would make a profit of $5,000 and Blue Mart a profit of$4,000. The student said the exact opposite, meaning that Red Shop would make$3,000 profit and Blue Mart $3,500. The student answer is incorrect.4)1/1a.1 Point: Student redrew the graph correctly.FRQ #2 – 9/12 PointsA)4/4a.1 Point: Drew the demand curve sloping downwards and drew the MR curvebelow the demand curve.b.1 Point: Showed that the profit maximizing quantity is at MC=MR.
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Supply And Demand,English-language films,Price point,Inverse demand function,Blue Mart,Chevelle