Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Macroeconomics Expert

1. Consider a model of Cournot competition, with 2 firms and a linear inverse demand function  P(Q) =  a –  Q (where  Q  =  q1 +  q2 is the total quantity produced by the two firms and  a is a parameter). The firms have different marginal costs: c1 for Firm 1 and c2 for Firm 2.

(a) Find the Nash equilibrium.

(b) Assume Firm 1’s marginal cost is larger (c1 >  c2). Which firm produces more in equilibrium? How do the quantities produced in equilibrium change if Firm 1 improves its technology, leading to a lower c1 (while c2 is unchanged)?

(c) Find the total quantity produced and each firm’s profit in equilibrium. Describe what happens to these when Firm 1 changes its technology as above.

2. Two people are engaged in a joint project. If each person i puts in the effort xi, the outcome of the project is worth  f(x1, x2). Each person’s effort level xi is a number between [0,1], and effort costs c(xi). The worth of the project is split equally between the two people, regardless of their effort levels, so the net payoff of each player is  f(x1, x2)/2 - c(xi).

Draw the players Best Responses, and find the Nash equilibria when

(i) f(x1, x2) = 3x1x2 and c(xi) = xi2, for i = 1, 2.
(ii) f(x1, x2) = 4x1x2 and c(xi) = xi, for i = 1, 2.

Provide a brief interpretation in each case.
 
3. Find all the Nash equilibria (both pure and mixed) of the 2-player game below.
 
       L       M       R
A  -1,1    3,1     1,2
B    3,3   2,-1    0,0
C    0,0   0,2     3,3
 
4. Consider the following 2-player game:
 
      L     R
U  2,2   1,2
D  5,1   0,0
 
(a) Allowing for mixed strategies, graph the Best Responses.
(b) Give all the Nash equilibria (pure and mixed) of this game.

Macroeconomics, Economics

  • Category:- Macroeconomics
  • Reference No.:- M91243
  • Price:- $45

Guranteed 36 Hours Delivery, In Price:- $45

Have any Question? 


Related Questions in Macroeconomics

Market failure market failure is a situation in which a

Market Failure Market failure is a situation in which a givenmarket does not efficiently organize production or allocate goodsand services to consumers. Overcoming market failure is asignificant challenge for the governm ...

Describe what occurs to american imports and exports when

Describe what occurs to American imports and exports when the U.S. dollar is strong. Describe what occurs to American imports and exports when the U.S. dollar is weak What precautions can the Federal Reserve take to avoi ...

Why are most environmental resources un-priced or

Why are most environmental resources un-priced (or under-priced) and what are the consequences of this? Under what circumstances is it desirable to monetize priceless environmental amenities? Briefly describe three metho ...

Part a what is classical dichotomy what is the neutrality

Part A) What is 'Classical Dichotomy'? What is the neutrality of money? Are the two related? If so,how are they related? What are the major economic and political conclusions of 'Classical Dichotomy'? 5) Part B) Do Class ...

When installing utp cable for a horizotnal link it is very

When installing UTP cable for a horizotnal link, it is very important to minimize crosstalk. Explain what crosstalk is, why crosstalk can be a problem, and how it is minimized when terminating UTP cables.

National hospital is the only employer of nurses in the

National Hospital is the only employer of nurses in the county of Castoria, and it acts as a profit-maximizing monopsonist in the market for nursing labor. The marginal revenue product for nurses is w = 50 2N, where w is ...

In a context of 220 to no more than 250 wordsthe general

In a context of 220 to no more than 250 words: The General Manager (GM) of a car dealership is working on a three-year business plan. The GM expects inflation to rise over the next three years. How will higher inflation ...

Suppose that donna consumes smoothies and pizzas the price

Suppose that Donna consumes smoothies and pizzas. The price of smoothies is $5 and the price of pizzas is $10. The table below shows Donna's utility from the consumption of each good, and each row represents a possible c ...

1 suppose you are hired to manage a small manufacturing

1. Suppose you are hired to manage a small manufacturing facility that produces Widgets. (Part A) You know that you are operating in a monopolistically competitive market, that is, you are a small part of a large market ...

Question 1 explain why real gdp might be an unreliable

Question 1: Explain why real GDP might be an unreliable indicator of the standard of living. Question 2: Why does unemployment arise and what makes some unemployment unavoidable? Question 3: Consider the following statem ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen