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Author Question: Overcoming the Prisoners' DilemmaRelaxation Station and Freds both sell craft items at a constant ... (Read 110 times)

Rafic Kaaki

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on: Nov 23, 2022
Overcoming the Prisoners' Dilemma

Relaxation Station and Freds both sell craft items at a constant average cost of $1 per unit. Each firm must decide between charging a low price ($9 per unit) or a high price ($16 per unit). Assuming low-price guarantees are illegal, here are the possible outcomes:
• The craft stores form a cartel: each firm sells 30 units at the high price
• The craft stores do not collude (duopoly): each firm sells 50 units at the low price
• One craft store underprices the other: the low-price firm sells 119 units and the high price firm sells 6 units
If both firms agree to choose the high price, how much more could Relaxation Station earn if it cheated on the price-fixing arrangement?
Please round your final answer to two decimal places.
◦ $50.00
◦ $862.00
◦ $502.00
◦ $552.00
Macroeconomics ¦ Acemoglu, Laibson, List ¦ 3rd Edition
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Marked as best answer by Rafic Kaaki on Nov 23, 2022

Talvinder.Singh

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Reply #1 on: Nov 23, 2022
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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Rafic Kaaki

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Reply 2 on: Nov 23, 2022
Great answer, keep it coming :)

parker125

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Reply 3 on: Yesterday
Excellent

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