Tit for tat stragy is retaliatory in a repeated game. It is forgiving, when you coperate I
cooperate. Holds when the number of players are small and stable, the end period is unkown
and cost and demand conditions are stable.
Nash equilibrium : is a strate
first question
Cost is falling bt at a diminishing rate
C = aQ^b
C is ac of producing Qth output
A is ac of producing first unit of output
B is the rate of change IBM as q changes and b is less than 0
Log c is log a + b log q b is the elasticity of output
OLigopoly
Paragraph (not > than 1 page) :
1. Topic Title (Name of Firm must belong to an Industry)
Work on a Firm refer to the Industry , industry talk about the firms
Points to be covered:
1. Why have you chosen this topic (ex. always has a prescence in
1. There are economies of scope, if
C (Q1 , Q2 ) < C (Q1 , 0) + C (0, Q2 )
75 0.25Q1Q2 + 0.1Q21 + 0.2Q22
< 2 75 + 0.1Q22 + 0.2Q2
2
0 < 75 + 0.25Q1Q2.
With Q1 = Q2 = 10, this holds and therefore there are economies of scope.
b. Complementarities exist, if
a. The price that Candak will choose is given at MR = MC
P = 5000 - .2Q
MR = Derivative of TR
TR = PQ = Q(5000 - .2Q)= 5000Q - .2Q2
Therefore MR = 5000 - .4Q
TC = 20,000,000 + .05Q2
MC = .1Q
Therefore I solve for Q at MR = MC
MR = MC
5000 - .4Q = .1Q
.5Q
Up is the dominant stratefy for A because no matter hwat b chooses up gives a mximum payout
For B when A chooses up best strateg yfor B is left , when A chooses Down best strategy for B
is right therefore B does not have any dominant startegy
Secure strat