Macroeconomics

[Solved] Game-Theoretic

Section II: Game-theoretic approach toward analyzing output behavior of rivals (50 points) Firms X and Y are duopolists facing the same two strategy choices. They can either tacitly collude or they can compete in a Cournot fashion. The market demand for their product, as well as their respective cost curves, are as follows: C(qx) = C(qy) =50qi (firm X and Y’s total cost curves), where i=x or y MC(qy) =MC(qy) = 50 (firm X and Y’s marginal cost curves) P=500-5Q, (market demand), where Q = qx + qy . C(q) and have the same cost structure: marginal cost and average cost both=50 a.) Calculate the respective output levels of each firm if they collude to set monopoly prices.  b.) Calculate the respective output levels of each firm if they adhere to the Cournot model.  c.) What four possible output combinations are available in this game? d.) Derive the for possible profit outcomes for each firm that arise from producing the four possible output combinations available in this game. e.) Use these profit outcomes to construct a 2×2 normal representative matrix for this game. f.) Does either firm have a dominant strategy? If so, what is it? g.) Is there a Nash equilibrium for this game? If so, what is it? h.) Is the outcome of this game a prisoner’s dilemma? Please Explain? Please show all work to receive full credit. For more information on Game-Theoretic read this: https://en.wikipedia.org/wiki/Game_theory

Jan 2nd, 2022

Try it now!

Calculate the price of your order

We'll send you the first draft for approval by at
Total price:
$0.00

How it works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.