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Please show me how to calculate this. Thank you Consider a market for a homogenous product with four active companies. Firms have a constant marginal
Please show me how to calculate this. Thank you
Consider a market for a homogenous product with four active companies. Firms have a constant marginal cost of production of $10. The market demand is given by 13(1)) = 90 11 Firms set prices in a repeated game with infinite horizon and a discount factor 6 6 [0,1]. (c) [12 marks] Suppose all four firms are active in two markets. Market A is described by the set-up in subquestion (a), that is, demand arises in every period. In the second market, market B. demand only occurs every second period as assumed in subquestion (b). Construct a subgame perfect equilibrium with trigger strategies in which firms collude on the industry-profit maximising profits and punish deviations by reverting forever to the static Nash equilibrium in both markets. Under which condition does this equilibrium hold? Explain the difference to (a) and (b)Step by Step Solution
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