Overview
Collusion
PD Game
Trigger Strategy (grim strategy) with discounting
Tit for Tat (Nice Strategy)
Trigger
G
E
Westinghouse
C
D
C (100,100)
(25,120)
D (120,25)
(80,80)
Note that a rational pl
Problem Set #1 Suggested Answers
1a) We are given that the total cost function is C(q) = 48 + 3q 2 + 2q. Then:
The average cost function is AC(q) =
C(q)
q
The marginal cost function is M C(q) =
48
q
=
Midterm 1 - suggested solution
1) Perfect Competition (15 points)
Find first the MES (minimum of AC):
AC(q)= 8y-8=0, qMES=1
pMES =AC(1)=16
a) The quantity produced by each firm in market 1 is qMES=1.
Economics 3510
Talia Bar
PRELIM 1
Question 1 (Total points: 12)
In a perfectly competitive market, with free entry and exit, all producers
of a homogeneous good are identical. Each rms cost function i
Econ 440, Midterm 1 Suggested Solutions
1)
In the long run equilibrium, each rm produces qM ES and the market
price is pM ES : As a result of the change the cost becomes C new (q) =
0:75C (q) ; and th
Spring 2015 Economics 3461, Talia Bar
Midterm 1
Exam Date: Tuesday, February 26
Exam Begins: 12:30 PM
Exam Ends: 1:45 PM
There are 65 points, you can use the number of points allocated to each questio
Today: Regulation and Deregulation
Ofce Hours: 10-12 saturday book worms
Final: 4 out of 5 questions
- 3 questions from last section
Betrand
non-price strategies
R & D + VR's (vertical restraints/rest
The Cournot-Nash model
is based on the assumption that a rm's competitors maintain their current
outputs.
Model results in an equilibrium quantity that is greater than the monopoly
quantity but i
Class Announcements:
Focus on 11.1.1-. 11.1.3 *KREPS+WILSON MODEL (WON'T FOCUS ON
LIMIT P)
ONLY RESPONSIBLE FOR CHAPTER 11 ON THE MIDTERM
PRICE STRATEGIES
2 PLAYERS, INCUMBENT AND POTENTIAL ENTRANT
L
Economics 3461
Problem Set 2 Solutions
Note: Please try the problems first before consulting the solutions!
1.a. Find the equations for each firm's residual demand and residual marginal revenue
curves
Economics 3461
Problem Set 3
From your book:
Chapter 12 problem #1.
Chapter 15 (4th ed) problem #3 (for the 3rd edition its chapter 14 #3).
1. Firm 1 faces demand of q1=84-2P1+P2, and has marginal co
Problem Set #2 Suggested Answers
1) The (pure-strategy) Nash equilibria for each game are listed below:
PrisonersDilemma: ( D , D ).
Chicken: ( dare , chicken ) and ( chicken , dare )
Game C: There ar