Answer all questions as soon as possible.

When firms price discriminate they what?

a. get additional surplus from consumers who have bought at the profit-maximizing uniform price but lose sales because of the higher prices

b. maintain surplus form existing customers but pick up additional consumers that would not have bought at the profit-maximizing uniform price

c. get additional surplus from consumers who have bought at the profit-maximizing uniform price

d. none of the above

In a repeated prisoners' dilemma game

a. firms choices are not influenced by their opponent actions

b. the outcomes are the same in a static prisoner's dilemma game

c. the players act sequentially

d. cooperation may result if the game is played indefinitely

The normal-form game below depicts a bargaining game between the management of a firm and the union. They are bargaining over how much of a $500 surplus to give to the union. It is assumed that the surplus can only be split into $250 increments. Because they want to avoid long negotiations they agreed they will play this game simultaneously. Each will write down the chosen strategy and will commit to it. In the matrix, the firs payoff in each cell corresponds to the Union and the second to the Management. Find the Nash equilibrium(ia) to this game.

Management $0 $250 $500 $0 ($0, $0) ($0, $250) ($0, $500) Union $250 ($250, $0) ($250, $250) (-$10, -$10) $500 ($500, $0) (-$10, -$10) (-$10, -$10)