Question

One – period game

If there are two companies who control the market and compete on
price what would the payoff matrix look like for the prisoner’s
dilemma? **DRAW THE MATRIX** (Company A on top, B on
the side, when both go high the profit $36 for A and $36 for B when
both go low the profit is $18 for A and $18 for B, When A goes high
and B goes low the profit is $48 for B and $16 for A and when A
goes low and B goes high the profit is $16 for B and $48 for A and)
What will they end up doing? What does it mean to have a dominant
strategy in the prisoner’s dilemma? What is a Nash-equilibrium? Is
the solution for this problem Nash?Would you expect the same result
if this was a “repeated” game? Explain.

Game where someone goes first - What is backward induction

One-period game , Multi-period game - differences

What is the principal agent problem?

Negative / positive externalities.

Public goods, private goods, club goods, common goods

Tragedy of the commons

Under-funded, Free rider

.For a **perfectly competitive** industry.

If the equation for the Supply is P = 2Q_{s} and the
equation for the Demand is P = 120 - Q_{d}

What equation determines the production level for a single firm if the firm is in a perfectly competitive market?

What is the equilibrium Quantity/Price, CS, PS, TS

What is the elasticity of demand at the equilibrium price and quantity? Is it elastic?

For a **Monopoly**.

If the equation for the Supply is P = 2Q_{s} and the
equation for the Demand is P =120 - Q_{d}

What equation determines the production level for a monopoly firm?

What is the Monopoly Quantity/Price, MC, CS, MRent, PS, TS, DWL

If the marginal cost is 6, the price is 14 and the quantity produced is 8 what is the value of the monopoly rent?

What is the relationship between the price for monopoly, Oligopoly, a PC firm?

What is the relationship between the quantity for monopoly, Oligopoly, a PC firm?

Name a company that is perfectly competitive, oligopoly, monopoly, monopolistic competition

What are the differences between monopoly, oligopoly and monopolistic competition?

PC/Monopoly/Monopolistic Competition/Oligopoly – What are the characteristics

Three different models of Oligopoly

Cartel

Collusion

Answer #1

If the marginal cost is 6, the price is 14 and the quantity
produced is 8 what is the value of the monopoly rent?
What is the relationship between the price for monopoly,
Oligopoly, a PC firm?
What is the relationship between the quantity for monopoly,
Oligopoly, a PC firm?
Name a company that is perfectly competitive, oligopoly,
monopoly, monopolistic competition

1.
If a single-price monopoly wants to sell a great quantity of output
it must..
a. raise its price
b. simply produce more and sell it at the same price
c. lower its price
d. tell consumers to buy more because it's a monopolist
2. As output increases, marginal revenue...
a. increases for a perfectly competitive firm
b. is constant for a monopolistically competitive firm
c. increases for a monopoly
d. decreases for a perfectly competitive firm
e. decreases for...

What are the characteristics of a competitive market? What is
the relationship of price to average total cost in a competitive
market in the short run and the long run? Define “price taker”.
What is meant by entry and exit of firms and what does it mean for
profitability in the short run and long run?
What is a “natural” monopoly? How is that different from a
“government created” monopoly? What is the role of regulation in
monopolistic markets? How...

2. (10+10+6) Suppose you have the
following data:
Market demand is
P =
200 – 5Q
Total Cost Function is
TC = 150 + 6Q+ 2Q2
a) If this market has only one firm
(monopoly), compute the quantity, price and profit of this firm.
Compute PS.
b) If this market had many firms
(Perfect Competition), compute competitive market output, price,
and profit. Compute TS.
c). Illustrate your answers in (a) and
(b) on the same graph. Your graph...

2. (10+10+6) Suppose you have the
following data:
Market demand is
P =
200 – 5Q
Total Cost Function is
TC = 150 + 6Q+ 2Q2
a) If this market has only one firm
(monopoly), compute the quantity, price and profit of this firm.
Compute PS.
b) If this market had many firms
(Perfect Competition), compute competitive market output, price,
and profit. Compute TS.
c). Illustrate your answers in (a) and
(b) on the same graph. Your graph...

1. There are only two firms producing identical goods. Each firm
has the cost structure TCi = 2qi2 + 40qi + 11552 which makes the
firm’s MCi = 4qi + 40 for i = 1,2 for the two firms. These are the
only two firms in the market where the MARKET demand for the good =
P = -3Q+ 800.
a) Explain why each firm producing q1 = q2 = 47.5 generates the
monopoly outcome. Find the market price and...

1. A distinguishing characteristic of monopolistically
competitive market is
A.
price discrimination
B.
differentiated products
C.
having long-run economic profits
D.
having short-run economic losses
2. The Nash equilibrium in a duopoly market would result in
A.
An equilibrium price higher than the "monopoly price" but a
lower equilibrium quantity compared to the " monopoly quantity"
B.
An equilibrium price higher than a competitive price but a lower
equilibrium quantity compared to a monopoly quantity
C.
an equilibrium quantity higher...

Which of the following is most likely produced in a
monopolistically competitive market?
a.
Automobiles
b.
Wheat
c.
Oil
d.
Fast food
e.
Soybeans
Oligopolists are more sensitive to the pricing and output
policies of their rivals when:
a.
there are many firms in the industry.
b.
all firms produce identical products.
c.
there are barriers to entry.
d.
there is freedom of entry and exit.
e.
their products are highly differentiated.
It is harder to explain the behavior of...

Consider two firms, Firm A and Firm B, who compete as
duopolists. Each firm produces an identical product. The total
inverse demand curve for the industry is ? = 250 − (?? + ?? ). Firm
A has a total cost curve ?? (?? ) = 100 + ?? 2 . Firm B has a total
cost curve ?? (?? ) = 100 + 2??.
a. Suppose for now, only Firm A exists (?? = 0). What is the
Monopoly...

1. Compared with a perfectively competitive market a monopoly is
inefficient because
a. it raises the market price above marginal cost and produces a
smaller output.
b. it produces a greater output but charges a lower price.
c. it produces the same quantity while charging a higher
price.
d. all surplus goes to the producer.
e. it leads to a smaller producer surplus but greater consumer
surplus.
2. The demand curve of a monopolist typically...

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