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Suppose that demand is given by P = A - Q and marginal costs are constant and equal to c where A > c. Suppose that there are n firms and the stage game is Cournot.
(a) Find the critical value of the discount factor to sustain collusion if the firms play a supergame and use grim punishment strategies. Assume that the collusive agreement involves equal sharing of monopoly output and profits.
(b) How does the minimum discount factor depend on the number of firms? Why?
Define the equity premium and determine its value
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Define Demand and Supply - What may cause individual household to buy more goods and services?
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some economist believe that the 2008 economic recession and financial crisis was caused by a perfect storm. explain
A pure monopolist determines that at the current level of output the marginal cost of production is $2.00, average variable costs are $2.75, and average total costs are $2.95. The marginal revenue is $2.75. What would you recommend that the monopolis..
Suppose a firm is currently maximizing its profits (i.e., following the MR = MC rule). Assuming that it wants to continue maximizing its profits, if its fixed costs increase, it should. Which of the following is true about a monopoly?
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