Question

1. In a tit?for?tat ?strategy, a player A. copies the action of its? rival's prior move...

1. In a tit?for?tat ?strategy, a player

A. copies the action of its? rival's prior move in the subsequent rounds. B. maximizes the joint profit in the game. C. randomly punishes its rival. D. ensures that the joint profit is maximized in each round.

2.

The deadweight loss generated by a perfect?price?discriminating monopoly

A. equals the sum of all lost consumer surplus. B. is greater than the deadweight loss of a single?price monopoly. C. equals the deadweight loss of a single?price monopoly. D.equals zero.

3. A perfect price discriminator ____.

A. generates a deadweight loss to society.

B. charges each buyer her reservation price.

C.charges different prices to each customer based upon different costs of delivery.

D. charges lower prices to customers who buy greater quantities.

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Homework Answers

Answer #1

Answer.)

Q1.) A. copies the action of its? rival's prior move in the subsequent rounds.

Q2.) D.equals zero.

Perfect price discrimination allows Monopoly to theoretically capture all mutually beneficial trades, thus maximizing pareto efficiency and eliminating the dead-weight loss.

Q3.) B. charges each buyer her reservation price.

perfect price discrimination requires the monopoly seller of a good or service to know the absolute maximum price (or reservation price) that every consumer is willing to pay.

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