11. One possible strategy is that each firm produces. This gives a more Pareto efficient outcome. But given that firm 2 produces this quantity, how much does firm 1 want to produce? (a) q₁ = = 90 (b) 91 = 60 (c) 91 = = 135 (d) 91 = 110 (e) 91 = 123 12. Assume this game is infinitely repeated and the interest rate in this economy is r. For what values of r the strategy in (3) is sustainable by using a "Grim Trigger" strategy? (a) r ≤.5 (b) r ≤.395 (c) r ≤.488 (d) r ≤.152 (e) r ≤.294

11. One possible strategy is that each firm produces. This gives a more Pareto efficient outcome. But given that firm 2 produces this quantity, how much does firm 1 want to produce? (a) q₁ = = 90 (b) 91 = 60 (c) 91 = = 135 (d) 91 = 110 (e) 91 = 123 12. Assume this game is infinitely repeated and the interest rate in this economy is r. For what values of r the strategy in (3) is sustainable by using a "Grim Trigger" strategy? (a) r ≤.5 (b) r ≤.395 (c) r ≤.488 (d) r ≤.152 (e) r ≤.294

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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