Question

The basic setup of a "game" requires which set of components? O O O O players, preferences, sequences, and payoffs preferences, payoffs, strategies, and returns players, sequences, payoffs, moves, and profits players, information, strategies, outcomes, and payoffs Suppose that an industry has a pre-merger Herfindahl-Hirschman Index (HHI) of 2,500 and two firms in that industry are trying to merge. Based on the given information, which statement is TRUE? The merger is likely to be challenged, The merger is likely to be approved. The merger is likely to be approved if it raises the HHI by less than 200 points. The merger is likely to be disapproved. The primary objective of early antitrust legislation was to achieve: O de-regulation. o increased competition. income and wealth equity. O production efficiency. Which condition will NOT contribute to a cartel's stability? Ofew members O nonprice discounts O significant barriers to entry O government protection The best-response method assumes that each player will: choose his or her best payoff, taking into account the actions of all other players. O always choose the action that is the cheapest to implement. o choose his or her best payoff, ignoring the actions of all other players. cooperate with all the other players to maximize their joint outcome. < Question 17 of 30 > Attempti In perfect price discrimination, a monopolist: charges different groups of people different prices. charges different customers different prices depending on the quantities they purchase. obtains all the consumer surplus from its customers. charges each customer the minimum price he or she is willing to pay

Answer 1

Q1) option d)

in a game, we need player, payoff, strategy, outcome, & information sets

2) option A)

As pre merger hhi is 2500, so market is highly concentrated, so post merger hhi will be above 2500, so if ∆ in hhi is less than 100, then merger will not be challenged

3) option b)

purpose of anti trust laws is to promote & enhance Competition by preventing the mergers, that will harm the Competition

4) option b)

If few members, then it's easy to detect which Firm has cheated, so cartel will be stable

Similarly if entry barriers & govt protection, then cartel will be stable.

Non price discounts like Product Differentiation , is not factor for cartel stability

5) option A)

in case of BR function, each player moves along his BR, taking in to account, the action of all other players

6) option c)

in Perfect price discrimination, the Monopolist extracts the entire as CS , as his profit,

by charging each Consumer his Maximum WTP