Practice+Final+1_Solution

# Charlieenterswithlowermarginalcostsatpointethananniean

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Unformatted text preview: n to him? Why or why not?  (Justify your answer using a game tree and appropriate analysis.)            6      Firms and Markets   Spring 2010  Final Exam                The COO is not completely correct. Dime should move first. But he should  produce 80 tons. If Dime moves first and plays 80, this will make Quarter play 50.  So Dime will get 150 and Quarter gets 75. This is the better for Dime than playing  either of the two equilibria in the simultaneous move game.    [2 points] Drawing tree and payoffs correctly.  [2 points] Solving last stage of the game correctly. (Judged based on their own  numbers)  [2 points] Solving first stage of the game correctly. (Again based on payoffs they  have)   [2 points] For conclusion. (Give points if conclusion is correct given own  numbers)    Sat sections gets one bonus point if they correctly write out SPNE:   (80, (70,60,50)) OR  “Quarter plays 80; Dime plays 70 if Q plays 50, D plays 60 if Q plays 60,  and D plays 50 if Q plays 80)”  (No penalty for not mentioning.)      7      Firms and Markets   Spring 2010  Final Exam           QUESTION 2. Market for Ready Mix Concrete [30 points]       Since wet concrete cannot travel more than an hour before hardening, the ready mix  concrete industry in any particular market is only produced and served by local firms.  It  is used in construction of roads and buildings, and is essentially identical across different  producers. Below is a chart...
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## This document was uploaded on 03/09/2014 for the course BUS 01 at NYU.

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