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Category > Statistics Posted 29 May 2017 My Price 6.00

Demand and costs are as given in the preceding question

6.    Demand and costs are as given in the preceding question.

(a)      Find the limit output for fixed costs ( f ) equal to 50, 32, 18, and 2.

(b)      What is the SPNE for the entry game with the following timing: in the first-stage firm 1 can commit to its output; in the second stage firm 2 can enter and choose its output for fixed costs equal to 50, 32, 18, and 2?

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Alpha Geek
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Status NEW Posted 29 May 2017 06:05 AM My Price 6.00

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file 1496040952-Answer.docx preview (236 words )
6-----------. ----------- Â-----------  D-----------ema-----------nd -----------and----------- co-----------sts----------- ar-----------e a-----------s g-----------ive-----------n i-----------n t-----------he -----------pre-----------ced-----------ing----------- qu-----------est-----------ion-----------. -----------(a)----------- Â----------- Â ----------- Â-----------  F-----------ind----------- th-----------e l-----------imi-----------t o-----------utp-----------ut -----------for----------- fi-----------xed----------- co-----------sts----------- (Â----------- fÂ----------- ) -----------equ-----------al -----------to -----------50,----------- 32-----------, 1-----------8, -----------and----------- 2.----------- (-----------b)Â----------- Â ----------- Â----------- Â ----------- Wh-----------at -----------is -----------the----------- SP-----------NE -----------for----------- th-----------e e-----------ntr-----------y g-----------ame----------- wi-----------th -----------the----------- fo-----------llo-----------win-----------g t-----------imi-----------ng:----------- in----------- th-----------e f-----------irs-----------t-s-----------tag-----------e f-----------irm----------- 1 -----------can----------- co-----------mmi-----------t t-----------o i-----------ts -----------out-----------put-----------; i-----------n t-----------he -----------sec-----------ond----------- st-----------age----------- fi-----------rm -----------2 c-----------an -----------ent-----------er -----------and----------- ch-----------oos-----------e i-----------ts -----------out-----------put----------- fo-----------r f-----------ixe-----------d c-----------ost-----------s e-----------qua-----------l t-----------o 5-----------0, -----------32,----------- 18-----------, a-----------nd -----------2? ----------- An-----------swe-----------r -----------Q =----------- Q1----------- + -----------Q2 -----------So,----------- D(-----------Q) -----------= P----------- = -----------56 -----------–-----------
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