Table 17-19 Consider a small town that
has two grocery stores from which residents can choose to buy a
loaf of bread. The store owners each must make a decision to set a
high bread price or a low bread price. The payoff table, showing
profit per week, is provided below. The profit in each cell is
shown as (Store 1, Store 2).
|
|
Store
2 |
|
|
Low Price |
High Price |
| Store
1 |
Low Price |
(250,
250) |
(400,
50) |
|
High Price |
(50,
400) |
(325,
325) |
Refer to Table 17-19. If grocery store 1 sets a
high price, what price should grocery store 2 set? And what will
grocery store 2's payoff equal?
Table 17-9 The table shows the demand
schedule for a particular product.
|
Quantity |
Price |
| 0 |
16 |
| 1 |
14 |
| 2 |
12 |
| 3 |
10 |
| 4 |
8 |
| 5 |
6 |
| 6 |
4 |
| 7 |
2 |
| 8 |
0 |
Refer to Table 17-9. Suppose the market for
this product is served by two firms that have formed a cartel. If
the marginal cost of production is $4 and the fixed cost is $6, the
combined profit of the cartel will be
If an oligopolist is part of a cartel that is collectively
producing the monopoly level of output, then that oligopolist has
the incentive to increase production with the aim of
|
A. increasing profits for the group
of firms as a whole. |
|
|
|
|
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C. decreasing costs of
production. |
|
|
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D. increasing profits for itself,
regardless of the impact on profits for the group of firms as a
whole. |
|
|