PS20+homework

# PS20+homework

• Notes
• 2
• 100% (1) 1 out of 1 people found this document helpful

This preview shows pages 1–2. Sign up to view the full content.

Intermediate Microeconomics, 2010 Problem Set 20: Homework Due Mon/Tue March 29/30 1. Reconsider question 2 from Homework 19 (Guard for a Mall). Suppose the two stores choose the number of guards sequentially: rst store A chooses whether to hire zero, one, two, or three guards and then store B chooses whether to hire zero, one, two, or three guards. Find all subgame perfect equilibria. For each subgame perfect equilibrium, write down the complete equilibrium strategy of store B, i.e., write down how many guards B would hire, after A has hired X guards. 2. Suppose the demand for Pepsi is q p = 54 2 p p + 1 p c . The demand for Coke is q c = 54 2 p c + 1 p p . Each rm faces a constant marginal cost of zero. (a) Determine the Bertrand equilibrium prices. (b) What happens to the Bertrand equilibrium prices and pro ts if increased dif- ferentiation causes the demand for Pepsi to become q p = 104 2 p p +1 p c while the demand for Coke remains unchanged? 3. Suppose the (inverse) demand for pizza in a small isolated town is p = 10 Q . There are only two rms, A and B . Each has a cost function

This preview has intentionally blurred sections. Sign up to view the full version.

This is the end of the preview. Sign up to access the rest of the document.
• Summer '08
• Malley

{[ snackBarMessage ]}

### What students are saying

• As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

Kiran Temple University Fox School of Business ‘17, Course Hero Intern

• I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

Dana University of Pennsylvania ‘17, Course Hero Intern

• The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

Jill Tulane University ‘16, Course Hero Intern