{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

AK_HW5 - Answer Key for Homework#5 Question 1(a...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Answer Key for Homework #5 Question 1 (a) Microeconomics, Macroeconomics. (b) Macroeconomics. (c) (Microeconomics, Macroeconomics) and (Macroeconomics, Microeconomics). (d) Macroeconomics. (e) (Macroeconomics, Macroeconomics). No, we can reach to (10,10) payoff. (f) Yes, the dominant strategy for Prentice Hill is Macroeconomics. Yes, the domi- nant strategy for McGraw Hall is Macroeconomics. (g) Microeconomics. (h) (Microeconomics, Microeconomics) and (Macroeconomics, Macroeconomics). Yes, we can reach to (10,10) payoff at (Microeconomics, Microeconomics). (i) Yes, the dominant strategy for Prentice Hill is Microeconomics. Yes, the domi- nant strategy for McGraw Hall is Microeconomics. Question 2 (a) Action: Enter, Not. Strategy: (Enter, Enter), (Enter, Not), (Not, Enter), (Not, Not). (b) “Not” is the best response, since it gives larger payoff. (c) The (subgame perfect) Nash equilibrium is ($400, (Enter, Not)). (d) Although Samsumg announced uncompromising entry, “Not enter” is a best interest of Samsung, once Apple takes a low price. Question 3 (a) See the Figure 1. 1
Background image of page 1

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

View Full Document Right Arrow Icon
Figure 1: Range of Optimal q H P Q 5 10 500 250 MC Demand MR (b) The profit is maximized when MC = MR . And so MC = 5 + 0
Background image of page 2
Background image of page 3
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}