Order ID | 53563633773 |
Type | Essay |
Writer Level | Masters |
Style | APA |
Sources/References | 4 |
Perfect Number of Pages to Order | 5-10 Pages |
Oligopoly and Monopolistic Competition and Product Differentiation
Unit 8 | [Microeconomics] |
Unit 8 Assignment: Oligopoly and Monopolistic Competition and Product Differentiation
Name: –
Course Number: –
Section Number: –
Unit Number: – 8
Date: –
Problem
Dr. Fine and Dr. Feelgood are the only two medical doctors offering immediate walk-in medical services in the town of Springfield. That is, they operate in a duopoly. Each doctor can charge either a high price or a low price for a standard medical visit. The accompanying matrix shows their payoffs, in profits per patient (in dollars), for any choice that the two doctors can make.
Suppose the two doctors play a one-shot game—that is, they interact only once and never again. What will be the Nash (non-cooperative) equilibrium in this one-shot game?
FIRST Period | Payoffs | SECOND Period | Payoffs | TOTAL Payoffs | ||
Charges
(high or low) |
Charges
(high or low) |
|||||
Fine | Fine | |||||
Feelgood | Feelgood |
FIRST Period | Payoffs | SECOND Period | Payoffs | TOTAL Payoffs | ||
Charges
(high or low) |
Charges
(high or low) |
|||||
Fine | Fine | |||||
Feelgood | Feelgood |
FIRST Period | Payoffs | SECOND Period | Payoffs | TOTAL Payoffs | ||
Charges
(high or low) |
Charges
(high or low) |
|||||
Fine | Fine | |||||
Feelgood | Feelgood |
FIRST Period | Payoffs | SECOND Period | Payoffs | TOTAL Payoffs | ||
Charges
(high or low) |
Charges
(high or low) |
|||||
Fine | Fine | |||||
Feelgood | Feelgood |
Discuss whether this statement is true, false or ambiguous with respect to each of the criteria listed under a, b, c, and d. Justify your answers.
———————
References:
Microeconomics: Unit 8 Assignment: Game Theory and Perfect Competition and monopolistic competition in the Long run | ||
Content (15 points) | Points Possible | Points Earned |
Game TheoryCorrectly calculated the non-cooperative Nash equilibrium for one-shot game. | 3 | |
Two-shot game with two strategies: “always charge the low price” or “tit for tat”.
Find payoffs to Dr. Fine when: · Dr. Fine plays “always charge the low price” when Dr. Feelgood also plays “always charge the low price.” (a) · Dr. Fine plays “always charge the low price” when Dr. Feelgood plays “tit for tat.” · Dr. Fine plays “tit for tat” when Dr. Feelgood plays “always charge the low price.” · Dr. Fine plays “tit for tat” when Dr. Feelgood also plays “tit for tat.” |
4 | |
Considering the following statement: “In the long run, there is no difference between monopolistic competition and perfect competition.” discussed whether the following would be determined to be true, false, or ambiguous (justify your answers):
· The price charged to consumers · The average total cost of production · The efficiency of the market outcome · The typical firm’s profit in the long run |
8 | |
Analysis (6 points) | ||
Work demonstrates synthesis of concepts, research, and experience | 2 | |
Work demonstrates the student’s ability to tie relevant information to real-life applications. | 2 | |
Analysis exceeds basic comprehension to demonstrate higher-order thinking. | 2 | |
Writing (4 points) | ||
Correct use of APA 6th edition format, all sources used to support the paper are referenced | 2 | |
Sentences are clear, concise, and direct; tone is appropriate, spelling, grammar, and punctuation are correct. | 2 | |
Total | 25 |
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Oligopoly and Monopolistic Competition and Product Differentiation