Unformatted text preview: 1. Question 9, page 421 in the book parts a and b (DON”T DO part c) 2. Question 6, page 469 in the book Notice that MC 1 = MC 2 =60 Do first parts a) to d) and then continue with the following questions e) Suppose that MC 1 = 60 but MC 2 =30. Compute the new Cournot-Nash equilibrium. f) If MC 1 = 60, MC 2 =30 and the firms form a cartel, how much should they agree to sell in order to maximize price and at what price? Does any of the two firms have incentives to cheat on this agreement?...
View Full Document
- Spring '07
- Economics, English-language films, Following, Teaching assistant, The Final, WISCONSIN Economics