Home / Questions / The demand curve for education in a community with only two colleges is P 100 Q The cos...
Questions 1 and 2
Show transcribed image text Question 1; The demand curve for education in a community with only two colleges is P = 100 - Q. The cost of educating an additional student is 8. Complete the table below for the four scenarios described in a-d. There are no fixed costs. a. Both colleges get together and collude to price fix at a profit maximizing level. b. Both colleges assume that the other will hold the present tuition constant despite what the competition does. c. Both colleges assume that the other will hold the present enrollment constant despite what the competition does. d. College 1 believes college 2 will adjust to its new profit maximizing solution each time college 1 adjusts its enrollment strategy Question 2: In a dry and dusty desert town, only two people (Antoinette and August) have water wells. Each day, they begin their morning by pumping water, which they then bring to the town square to sell. Pumping water costs them essentially nothing, but time is such that each can afford to make only one trip to the town center, which means that they must decuide how much to pump at the start of each day. The townsfolk's demand for water is given in the table below: Suppose for simplicity that Antoinette and August are limited to pumping either 20, 30, 40 or 50 gallons of water each. a-Verify that the payoffs in the game table in the next page, which reflect the profits Antoinette and August earn, are accurate. Fill in any missing values. Remember that the market price is determined by total production, but that each producer's profit is determined by how much each chooses to produce. b. Suppose that Antoinette and August agree to collude and restrict their combined output to maximize their joint profits. They agree to divide production an dprofits equally. Referring to the payoff matric above, how many gallons will they agree to produce in total? How many gallons of the total market supply will each supply? How much profit will each earn? c. Does Antoinette have an incentive to cheat on this collusive agreement? Does August? If so, how will such cheating manifest itself? d. How does the game Antoinette and August are playing resemble a prisoner's dilemma game?
May 15 2020 View more View Less
a coupon bond that pays interest annually has a par value of 1000, matures in 5 years, and has a yield to maturity of 10%. the price of the bond today should be _____ if ...
Aug 13 2020The irreversible elementary reaction 2A —+ B takes place in the gasphase in an isothermal tubular (plug-Jlow) reactor. Reactant A and a diluentC are fed in equimolar rati...
Jul 31 2020Which of the following is a compartment that often takes up much of the volume of a plant cell? A) mitochondrionB) peroxisomeC) central vacuoleD) lysosome
Jul 16 2021weekend warriors, Inc has 35% debt and 65% equity in its capital structure. Determine the forms weighted average cost of capital
Jun 13 2021How many valence electrons does barium have, and what energy level do they occupy?(a) One valence electron in the 6s state.(b) Two valence electrons in the 6s state.(c) N...
May 22 2021Several copies of the report (is, are) being prepared for distribution.
Jul 01 2021In applying the high-low method of cost estimation to mixed costs, how is the total fixed cost estimated?Here is a tip:Fixed costs are costs that do not change with the l...
May 12 2021Required information [The following information applies to thequestions displayed below.] Victory Company uses weighted-averageprocess costing to account for its producti...
Jun 01 2021What is the effect of the recognition of warranty expense on the statement of cash flows? 106.John Rogers and Kim Thompson both perform work for Apex Manufacturing. J...
Jan 25 2020Ott Company had 210,000 shares of common stock outstanding on December 31, 2010. During the year 2011 the company issued 8,000 shares on May 1 and retired 14,000 shares o...
Dec 05 2019