Assignment 03.11 - Oligopoly.docx - Yoo-Shin Koh Alina Cruz Assignment 03.11 Oligopoly FRQ#1 \u2013 3\/6 Points 1 2\/2 a 1 Point Stated that north will be

Assignment 03.11 - Oligopoly.docx - Yoo-Shin Koh Alina Cruz...

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Yoo-Shin Koh Alina Cruz 8/9/2019 Assignment 03.11: Oligopoly FRQ #1 – 3/6 Points 1) 2/2 a. 1 Point: Stated that north will be better for Blue Mart b. 1 Point: Explained that Blue Mart earns a higher profit by locating north than it does by locating south ($4,000 versus $1,000) 2) 0/2 a. Lost 2 Points: Student answer said that the Red Shop choosing south is a dominant strategy, but that is incorrect. Choosing south is not a dominant strategy because if Blue Mart chooses south, Red Shop is better off when choosing north. Therefore, the student’s answer is incorrect. 3) 0/1 a. Lost 1 Point: Red Shop should choose south while Blue Mart should choose north because 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) 1/1 a. 1 Point: Student redrew the graph correctly. FRQ #2 – 9/12 Points A) 4/4 a. 1 Point: Drew the demand curve sloping downwards and drew the MR curve below the demand curve. b. 1 Point: Showed that the profit maximizing quantity is at MC=MR.
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