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04 final 2

# 04 final 2 - True False_l L E E El El El[I The sequential...

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Unformatted text preview: True False _l L E] E El El El [I The sequential equilibrium would be A chooses Heater and B chooses Air Conditioner. F Company A can ensure that B will pick Heater only if A picks Air Conditioner to start. F Company A will pick Air Conditioner to maximize its payoff. T If Company B picked ﬁrst the resulting equilibrium would be different. F 3. A monopolist has overall demand and marginal cost (MC) for its product of P=9-Q and MC=1 True False The monopolist output and price will be Q=5 and P=4 F If the monopolist could operate a two-part tariff it would be maximizing its proﬁt if it set P=5 F If the monopolist could practice ﬁrst-degree price discrimination it would sell every unit at a price in the elastic portion of the demand curve. F If a new entrant came into this industry with exactly the same product as the original ﬁrm, was also able to produce with MC = 1, and competed in prices with the original ﬁrm, the Nash equilibrium price charged to consumers would be P=1. T 4. At the local fair there is a large container of change consisting of pennies, nickels, dimes, and quarters. The container will be auctioned off using a traditional English auction format. There are hundreds of potential bidders who will be attending the auction. Each of these potential bidders has developed an estimate of the value of the coins in the container. A11 bidders will bid if they think they can proﬁt from purchasing the container. True False D E] The winner of the container will be the bidder with the most accurate estimate of the value of the container. F ...
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