some question about economics

Time left 1:58:52 Microeconomic Theory Question 10 Not yet Consider the following static game: answered Points out of R 13.00 101, 2 5, 4 Flag question D2, 3 1, 0 Choose pure strategies Nash equilibria (if any) (U,L) (U,R) O (D,L) (D,R) In a completely mixed Nash equilibrium, Player 1 takes U with probability and Player 2 takes L with probability The game is closest to * game from the lecture. Previous page Next pag0'45\"\" 8 Suppose that a monopolist firm is facing two types of consumers (A and B), and it can set different prices for them. 'I Not yet . . . mm Demand function l5 given by Points out of : 10 5.00 pd q V Flag question arid 1 : 8 i pa 2 Q The marginal cost is constant, c = 3 Calculate the difference between the prices pA p3 when the monopolist firm maximizes its profit. Caution: You might see a negative value in some versions. A half the credit for the wrong Sign. Answe {2 Previous page Time left 1:59:01 Microeconomic Theory Question 9 Not yet (a) Consider Cournot competition with four firms. The market demand function is given by p = a - bq where q is the total quantity in the market, and the answered cost of the production is c(q) = c . q. Points out of Then, FOC for Firm 1 is: 15.00 Flag question 00 = a - 2bq1 - bq2 -... - . -bq4 - C 00 = a - bq1 - bq2 -. . . -bq4 - c 00 = a - 2bq1 - bq2-. . . - . -bq4 00 = a - 2bq1 - 2bq2- -2bq4 Suppose a= 100, b= 2, c = 10 for part (a) and (b). Now, the NE strategy is Then, the total quantity is and the consumer surplus is (b) If the number of firms increases to infinity while keeping the market demand function and the cost functions same, then the equilibrium price converges to (c: 3pts Bonus: You can get 100 without solving this) Suppose that you are an economist at Department of Justice. You know that four firms are competing in quantities and the demand is given as in part (a), but do not know the value of c in each firm's cost function. If each firm produces 7 units, you can estimate by using the result of the Cournot model. Then, you can estimate DWL= Previous page Next page