Author Question: In game theory, if two rivals in an oligopoly can avoid a large loss by cutting price from 40 to 35, ... (Read 51 times)

bcretired · **on:** Jun 30, 2018

In game theory, if two rivals in an oligopoly can avoid a large loss by cutting price from 40 to 35,
a. neither will cut its price
b. one will charge 40 and the other will charge 35
c. their actions will depend on their respective strategies
d. each will cut price but not all the way to 35
e. they will collude to do what's best for both of them

Question 2

In deciding between using a public bureau or a private firm to collect garbage, elected officials may prefer a public bureau because
a. public bureaus have been shown to be more efficient than private firms in garbage collection
b. they can convey political favors by giving people jobs in the public bureau
c. public bureaus will be more responsive to consumers
d. citizens would have to pay if private firms collected garbage
e. taxes will be lower if the public bureau is in charge of garbage collection