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Author Question: There are two firms in the residential paint industry, Cool Shades (C) and Warm Hues (W). They ... (Read 41 times)

karen

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on: Jun 29, 2018
There are two firms in the residential paint industry, Cool Shades (C) and Warm Hues (W). They collude to share the market equally. They jointly set a monopoly price and split the quantity demanded at that price. Here are their options:
 
  i. They continue to collude (no cheating) and make 12 million each in profits.
  ii. One firm cheats and the other does not. The firm that cheats makes a profit of 14 million whereas the firm that doesn't makes a profit of 9 million.
  iii. They both cheat and each firm makes a profit of 7 million.
 
  a. Construct a payoff matrix for these two firms.
  b. How does this situation relate to the prisoner's dilemma?
  c. If each firm acted noncooperatively, how much profit would each make?
  d. Are the firms better off colluding (with no cheating) or competing? Explain.

Question 2

Actual investment spending does not include
 
  A) spending on consumer durable goods. B) spending on new houses.
  C) spending on new capital equipment. D) changes in inventories.
InMicro ¦ Hubbard, O'Brien ¦ 1st Edition
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amandanbreshears

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Reply #1 on: Jun 29, 2018
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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karen

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Reply 2 on: Jun 29, 2018
Great answer, keep it coming :)

emsimon14

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Reply 3 on: Yesterday
Excellent

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