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Unformatted text preview: s1 and π2(s1*,s2*) ≥ π2(s1*,s2) for all s2. C. π1(s1*,s2*) ≥ π2(s1,s2*) for all s1 and π2(s1*,s2*) ≥ π1(s1*,s2) for all s2. D. π1(s1,s2*) ≥ π2(s1*,s2*) for all s1 and π2(s1*,s2) ≥ π1(s1*,s2*) for all s2. Refer to the following normal form game of advertising for question. (Game 10.17) 5 21. Consider the above advertising game. Firms A and B know the game will be played for exactly 5 periods. What is the Nash equilibrium to this game? A. {Do Not Advertise, Do Not Advertise}. B. {Advertise, Advertise}. C. {Do Not Advertise, Do Not Advertise} provided the interest rate is less than 0.10 percent. D. {Advertise, Advertise} provided the interest rate is less than 0.50 percent. 22. A monopoly produces widgets at a marginal cost of $10 per unit and zero fixed costs. It faces an inverse demand function given by P = 50 ‐ Q. What are the profits of the monopoly in equilibrium? A. $300. B. $400. C. $500. D. $600. 23. A monopoly produces widgets at a marginal cost of $10 per unit and zero fixed costs....
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 Fall '12
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 Monopoly

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