Question

30-31

Exhibit 10.8 Firma Loures Scenarist Rais Firm B Scenarie Scenarios Low Price 30. Refer to Exhibit 10.8. If one of the firms lowers the price, then eventually the Nash equilibrium occurs in a. Scenario 1. b. Scenario 4. c. Scenario 1 and Scenario 2. d. Scenario 1 and Scenario 3. e. Scenario 1 and Scenario 4. Exhibit 9.3 $/Q 11/ YY 11 / ATC TD ITVI ii IN I II MR 11 0 500 900 1,500 1,100 1,700 31. Refer to Exhibit 9.3, which shows the cost and revenue curves for a non-discriminating monopolist. The total cost incurred by the monopolist for producing the profit-maximizing output is a. $16,500 b. $24,200. c. $16,200 d. $19,800 e. $30,800 Page

Answer 1

a) The Nash equilibrium will occur in scenario 4 where both the firm in the market will lower the price to make an equal benefit. The answer is "B".

b) The firm will be producing at the point were the MR=MC that is at 1100 and at the output the ATC curve is at 18, so total cost incurred by the firm will be 19800. the answer is "D"..