User Account

All Pages

Find the critical value of the discount factor to collusion

Assignment Help Microeconomics
Reference no: EM13874835

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?

Reference no: EM13874835

Questions Cloud

Why each one is of interest to you : Based on all the information you are able to recover and your review, what are the three (3) overall conclusions you have drawn about the Preventive Services Covered Under the Affordable Care Act?
Dividends are expected to grow-what is current share price : Yang Corp. is growing quickly. Dividends are expected to grow at a rate of 29 percent for the next three years, with the growth rate falling off to a constant 7.8 percent thereafter. If the required return is 15 percent and the company just paid a $3..
Food to cool to room temperature : If the refrigerator has a coefficient of performance of 1.2 and the cost of electricity is 10 cents per kWh, determine how much this person will save a year by waiting for the food to cool to room temperature before putting it into the refrigerato..
Discuss the problem of severe unemployment : Discuss the problem of severe unemployment in many African countries due to economic downturns and civil strife
Find the critical value of the discount factor to collusion : Find the critical value of the discount factor to sustain collusion if the firms play a supergame and use grim punishment strategies.
What is the gain or loss realized on the sale : Bob sells a stock investment for $45,000 cash, and the purchaser assumes Bob's $32,500 debt on the investment. The basis of Bob's stock investment is $55,000. What is the gain or loss realized on the sale?
Describe how the mix of state and non-state actors : Describe how the mix of state and non-state actors you identified should affect policy maker decision-making and policy development for critical infrastructure protection.
Real risk-free interest rate-constant inflation premium : Real risk-free interest rate – 4% Constant inflation premium – 7% Maturity risk premium – 1% Default risk premium for AAA bonds – 3% Liquidity premium for long-term treasury bonds – 2 % Assume that a highly liquid market does not exist for long-term ..
Find the minimum industry output that is sustainable : As a function of the discount factor, find the minimum industry output that is sustainable- assuming the two firms agree to produce the same amount.

Reviews

Write a Review

Microeconomics Questions & Answers

  The free rider problem

Question: Explain why the free rider problem makes it difficult for perfectly competitive markets to provide the Pareto efficient level of a public good.

  Failure of the super committee is good thing for economy

Some commentators have argued that the failure of the “Super committee” is good thing for the economy?  Do you agree?

  Case study analysis about optimum resource allocation

Case study analysis about optimum resource allocation: -  Why might you suspect (even without evidence) that the economy might not be able to produce all the schools and clinics the Ministers want? What constraints are there on an economy's productio..

  Fixed cost and vairiable cost

Questions:  :   Which of the following are likely to be fixed costs and which variable costs for a chocolate factory over the course of a month?  Explain your choice.

  Problem - total cost, average cost, marginal cost

Problem - Total Cost, Average Cost, Marginal Cost: -  Complete the following table of costs for a firm.  (Note: enter the figures in the  MC   column  between  outputs of  0 and 1, 1 and 2, 2 and 3, etc.)

  Oligopoly and demand curve problem

Problem based on Oligopoly and demand curve,  Draw and explain the demand curve facing each firm, and given this demand curve, does this mean that firms in the jeans industry do or do not compete against one another?

  Impact of external costs on resource allocation

Explain the impact of external costs and external benefits on resource allocation;  Why are public goods not produced in sufficient quantities by private markets?  Which of the following are examples of public goods (or services)? Delete the incorrec..

  Shifts in demand and movements along the demand curve

Describe the differences between shifts in demand and movements along the demand curve. What are the main factors which can shift the demand curve? Explain why they cause the demand curve to shift. Use examples and draw graphs to support your discuss..

  Article review question

Article Review Question: Read the following excerpts from the article "Fruit, veg costs surge' by Todd, Dagwell, published in the Herald on January 25th 2011 and answer questions below:

  Long-term growth, international trade & globalization

Long-term Growth, International Trade & Globalization:- This question deals with concepts such as long-term growth, international trade and globalization. Questions related to trade deficit, trade surplus, gains from trade, an international trade sce..

  European monetary union (emu) in crisis

"Does the economic bailout of Spain and Greece spell the beginning of the end for the European Monetary Union (EMU)?"

  Development game “settlers of catan”

Read the rules of the game, the overview and the almanac for the Development Game "Settlers of Catan"

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd