vertical S curve at Q = 1
What will be an ideal response?
- There is only one of its kind available to be sold
- Price is determined by demand
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Refer to Table 14-2. Is the current strategy in which each firm charges the low price and earns a profit of $7,000 a Nash equilibrium? If not, why and what is the Nash equilibrium?
A) No, it is not a Nash equilibrium because each firm can do better by charging the high price. The Nash equilibrium occurs when each firm charges the high price and earns a profit of $10,000. B) No, the current situation is not a Nash equilibrium. The Nash equilibrium for each firm is to have the other charge a high price and for the firm in question charge a low price. C) Yes, the current situation is a Nash equilibrium. D) No, the current situation is not a Nash equilibrium; it is a dominant strategy equilibrium. There is no Nash equilibrium in this game.
The SSS Co has a patent on a particular medication. The medication sells for $1 per daily dose and marginal cost is estimated to be a constant at $0.20
Assuming linear demand and marginal cost curves, use this information to estimate the deadweight loss from monopoly pricing if the firm currently sells 1,000 doses per day. Can this loss be justified?
The difference between the value of a good to sellers and its price is known as: a. consumer surplus. b. producer surplus. c. demand
d. supply.
Which of the following prohibits executives of competing firms from even talking about fixing prices?
a. Sherman Act b. Clayton Act c. Federal Trade Commission d. U.S. Justice Department