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In the text, we considered a sequential move game in which an entrant was considering entering an industry in competition with an incumbent firm. Consider now that the entrant, if fought, has the possibility of withdrawing from the industry (at a loss of 1 for the entrant and a gain of 8 for the incumbent) or staying (at a loss of 5 for each player). What is the equilibrium of this game? Discuss if the entrant is better off with or without the ability to withdraw.
Derive an expression for average cost. Derive an expression for marginal costs. Is there any range of production characterized by scale of economies? At what production level are scale economies exhausted?
Elucidate what is the minimal compensation t that induce the buyer to accept the exclusivity contract. What is the maximal compensation that the monopolist is willing to o er to the buyer.
Greg earns $10 per hour for work for up to 30 hours of work each week. He is paid $15 dollars per hour for every hour in excess of 30. Greg faces a 15 percent tax rate and pays 3 dollars an hour in child-care expenses for each hour he works. When gra..
illustrate what prevented the villagers from reaching this higher-income allocation of resurces when they acted independently
Explain why an industry in a perfectly competitive marketplace would choose to remain in business, if its profit is zero at equilibrium.
1.name 5 stylized facts about the business cycle.2. rank order these three ideas from most optimistic about how a
The expected salvage value of the furniture is $5,000 in 2015. Determine the recovery period for the furniture and its depreciation deductions over the recovery period.
q.youve been assigned a group paper with one other person. the paper costs c to produce and a good grade is worth v to
Which of the following is NOT a reason that we discussed for global imbalances that arose in the early 2000s and persist to some degree to this day?
US and Canada can both grow wheat and can do mining. Use the following table to look for which country has a comparative advantage in mining. (Hint: Find the cost of mining in terms of wheat in each country.)
"The lowering of barriers to trade and investment between countries within a trade group will probably be followed by increased price competition." Do you agree? Why? Why not?
In your opinion should our government impose price floors and/or price ceilings in our economy.
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