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Unformatted text preview: Ryan Oprea Econ 200, Fall 2008 Homework #3 This homework is due on the final day of classes. You may consult with others on the homework, but must turn in your own work (i.e. please dont copy homework from others) and must list who you worked with on the homework. If there is insufficient information to answer a question, state a reasonable assumption that allows you to do so and use it when working through the problem. 1. You are an economist at the Federal Trade Commission charged with regulating the widget industry. The industry consists of two firms, each of whom faces total costs of 10 y . Econometric analysis indicates that demand for widgets are roughly y = 75- p . Widget production takes time and requires advance orders of parts. Widgets also have a short shelf life. Combined, these forces mean (i) that firms set quantities in advance of the market and (ii) will sell all of the units they produce. Competition is therefore effectively in quantities....
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- Spring '09