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04 final 4

# 04 final 4 - | If Nick’s proﬁt maximizing quantity is...

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Unformatted text preview: | If Nick’s proﬁt maximizing quantity is equal to 4, his marginal revenue is constant but his marginal cost is rising. T 7. Sky-Ride Amusements operates an amusement park with the world’s largest roller coaster ride. Sky-Ride is a monopoly. Sky‘Ride has two types of customers: adults and kids. True False D U Selling ride tickets in bundles of two (one adult, one child) is always more proﬁtable for Sky Ride than selling individual ride tickets if the reservation prices for adults and kids are negatively correlated. F El El If adults and kids have a different price elasticity of demand at any given price, then the optimal two-part tariff scheme always ensures that marginal revenue for adults and kids are equal. F El If Sky-Ride discovers that adults and kids have exactly the same demand for rides, then no increases in proﬁts are possible if Sky-Ride abandons an optimal two-part tariff pricing scheme in favour of a ﬁrst-degree price discrimination scheme. T U El Suppose Sky-Ride sets the price of a ride on Saturday 30 percent lower than the price of a ride on Sunday. This price difference must reﬂect a lower level of demand on Saturday compared with Sunday. F 8. Consider the following statements about game theory. True False El D If neither of the two players in a one-shot, simultaneous move game have a dominant strategy, then a pure strategy Nash equilibrium necessarily does n_ot exist, but a mixed strategy equilibrium will always exist. F E El In the Nash equilibrium of any sequential game with two players, a player is not necessarily better off if allowed to move ﬁrst versus second. T U U The Nash equilibrium of any simultaneous-move game that is repeated for a sufﬁciently large but ﬁnite number of times (e.g. 200 consecutive months) is generally the same as the outcome that would result if the two players were able to perfectly collude. F ...
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