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What values of discount factor will grim punishment strategy

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An industry consists of two firms. The demand function for the product of firm i is qi = 24 - 5 pi + 2 p j .

The marginal cost of production for each firm is zero. For what values of the discount factor will grim punishment strategies-with reversion to Bertrand-Nash prices-support a collusive agreement to maximize joint profits?

Reference no: EM13874842

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