PS15 - Intermediate Microeconomics, Winter 2008 Problem Set...

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Intermediate Microeconomics, Winter 2008 Problem Set No 15 due: Wednesday, March 19; Thursday, March 20 To prepare for the next lecture, please read: Chapter 13, 452 - 457; 476-478, Chapter 14, 499-504. Q1. Suppose a monopolist faces a demand function D ( p ) = 100 Ap and suppose the monpolist has constant marginal costs of c . If A = 5 and c = 2 , Find the optimal price and the optimal quantity as a function of general A and c . Q2. Suppose the demand function for AA and UA for ±ights between Chicago and Detroit is D ( p ) = 100 Ap . If AA and UA each choose to supply a quantity of 30, what will be the market price? If UA chooses a supply of q UA = 30, what will be the market price as a function of the quantity that AA supplies? Given the choice q UA = 30 , and given constant marginal costs c = 1 , what is the optimal supply of AA? (You might want to choose A = 1 to make the question easier). Q3. Determine the strictly dominated strategies in the following games:
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PS15 - Intermediate Microeconomics, Winter 2008 Problem Set...

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