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oligopoly2-ho_001

oligopoly2-ho_001 - Bertrand Stackelberg Oligopoly(contd...

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Bertrand Stackelberg Cartels Oligopoly (contd.) Chapter 27
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Bertrand Stackelberg Cartels Midterm 2 Bring pencil/pen, bluebook, pink scantron 8 MC questions, like last time Important skills: Find monopoly p , q Analyze effects of policy (e.g. tax, subsidy, price ceiling) on monopoly Max profits using price discrimination (lecture and especially workouts 25.5-8) Analyze duopoly (Cournot, Bertrand, Stackelberg, collusion)
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Bertrand Stackelberg Cartels Oligopoly Considerations: Do firms compete on price or quantity? Do firms act sequentially (leader/followers) or simultaneously (equilibrium) Stackelberg models: quantity leadership Cournot equilibrium models: simultaneous choice quantity competition Bertrand equilibrium models: simultaneous choice price competition
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Bertrand Stackelberg Cartels Today Price competition (Bertrand duopoly) More quantity competition Stackelberg Duopoly Cartels/collusion
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Bertrand Stackelberg Cartels Bertrand Duopoly: price competition Firms compete on price No clear leader, follower so firms effectively choose p simultaneously Take the other firm’s price as given Market demand determines equilibrium output Both choose same price: divide demand evenly One sets lower price: that firm captures entire market
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Bertrand Stackelberg Cartels Bertrand Duopoly: price competition Suppose two firms have same MC What price to charge?
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Bertrand
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