AK 9. Regulation - part 3
1. Assume a natural monopoly with total cost 500 + 20Q facing a demand of Q = 100 P.
(a) Find the price that enables the monopolist to break even. Call this price P .
Answer: If price is set equal to the average cost,
Answer Key for HW 6: Marriage Model
1. Assume that there are three Ws and three Ms. Specify the preferences of each agent so that the
DAA generates the same match when the Ms propose as when the Ws propose.
Answer: The easiest way to do this is to have mi
Answer Key for HW 5. Public Good and Pivotal Mechanism
1. There are three individuals and each has an endowment of 40 units of the private good. Let
U1 = 1 x + y1 , U2 = 2 x + y2 , U3 = 3 ln (x + 1) + y3 . The production of 1 unit of X
Answers for Questions on Voting
1. Does the following family of preferences over the three alternatives X, Y, Z have the single-peak
property? Explain. There are four preference orderings, each represented by a column, and a
higher alternative is preferre