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Unformatted text preview: a. What is the prot-maximizing price per does of Ageless? b. Would you expect the elasticity of demand you face for Ageless to rise or fall when your patent expires? (ex 5.5) 3. For each of the following games, nd the dominant strategies (when they exist) and compute the Nash equilibria: L R U 2 ; 2 ; 1 D 1 ; 1 ; 1 L R U ; 1 ; 2 D 2 ; 1 & 1 ; & 1 L R U ; & 2 ; 5 D 3 ; & 4 & 1 ; & 1 4. Consider a market for a homogeneous product with demand given by Q = 37 : 5 & p= 4 : There are two rms, each with constant marginal cost equal to 40 . a. Determine the output and price under a Cournot equilibrium. b. Compute the e ciency loss as a percentage of the e ciency loss under monopoly. (ex 7.5) 5. Consider a duopoly for a homogeneous product with demand Q = 10 & p= 2 : Each rms cost function is given by C = 10 + q ( q + 1) : Determine the values of the Cournot equilibrium. (ex 7.6) 1...
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- Fall '07