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There are 2 firms: an incumbent (M) and an entrant (E). In year 1, only the incumbent (M) has the technology. In year 2, the
There are 2 firms: an incumbent (M) and an entrant (E). In year 1, only the incumbent (M) has the technology. In year 2, the entrant (E) has also developed the technology and must decide whether to enter or not. Production technology has fixed costs of 1500 per year and constant marginal cost, c = 150. Demand in each year is given by P = 420 - Q. = What is the limit price for this game? (give your answer to 2 d.p.) Answer: There are 2 firms: an incumbent (M) and an entrant (E). In year 1, only the incumbent (M) has the technology. In year 2, the entrant (E) has also developed the technology and must decide whether to enter or not. Production technology has fixed costs of 4500 per year and constant marginal cost, c = 580. Demand in each year is given by P = 880 - Q. = In the sub-game perfect Nash equilibrium for this game, profit for the incumbent firm is: Select one: a. 22500 O b. 18000 O c. 36000 O d. 4500 e. 23500 Of. 10000 There are 2 firms: an incumbent (M) and an entrant (E). In year 1, only the incumbent (M) has the technology. In year 2, the entrant (E) has also developed the technology and must decide whether to enter or not. Production technology has fixed costs of 1500 per year and constant marginal cost, c = 150. Demand in each year is given by P = 420 - Q. = What is the limit price for this game? (give your answer to 2 d.p.) Answer: There are 2 firms: an incumbent (M) and an entrant (E). In year 1, only the incumbent (M) has the technology. In year 2, the entrant (E) has also developed the technology and must decide whether to enter or not. Production technology has fixed costs of 4500 per year and constant marginal cost, c = 580. Demand in each year is given by P = 880 - Q. = In the sub-game perfect Nash equilibrium for this game, profit for the incumbent firm is: Select one: a. 22500 O b. 18000 O c. 36000 O d. 4500 e. 23500 Of. 10000
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