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Problem Set 1: Industrial Organization-BCOR 310 SPRING 2015 Professor: Brahim Guizani
Problem Set 1: Industrial Organization-BCOR 310 SPRING 2015 Professor: Brahim Guizani
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Problem Set 1
1. Discussion questions
As collusion
price in one period the two forms cannot stabilize the standers or
1
detect cheating because they cannot anticipate future actions as it is more
important than present actions cause prices are fixed during one period in
contrast to a number of periods
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2. Problems
I.
If both firms charge the same price, what is Firm 1s preferred price?
ii.
If both firms charge the same price, what is Firm 1s preferred price?
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iii.
What is the joint profit-maximizing price? How much output would each
firm produce it it charged the joint profit-maximizing price?