True.
In the Stackleburg's model, Stackleburg assume that one of the duo polish is supposed to be created in a few play the role of a leader and the other acts as a follower.
the leading duopolist A recognises that his rival celebrity has a definite traction function which a user's into his own property function and maximizes his profits.
if only one form substituted it will emerge as a leader and a stable equilibrium will emerge as the naive firm will act as a follower.
All else equal, firms produce more (in aggregate) in the Stackelberg setting than the Cournot setting....
Compare the duopoly outcomes under the Cournot and Stackelberg games. How do the two firms compete? Are the decisions simultaneous or sequential? In which game are profits higher? Which game is more efficient–i.e. leads to a higher quantity and a lower price–when the two firms have the same cost functions?
4. Think about a Cournot and a Stackelberg game. What do firms choose? Who goes first? In which game are profits higher? Which game is more efficient, such as higher quantity and lower price!
Which of the following is FALSE in the Stackelberg model? A. the first firm produces more than its rival B. the firms produce different quantities C. the firms produce sequentially D. Both firms have a reaction curve
level of aggregate output if the aggrega All else equal, a cost shock that shifts the aggregate supply curve to the left leads to a demand curve is downward sloping. price level and a A. higher; lower B. higher; higher C. lower; lower D. lower; higher When the AD curve is vertical and a cost shock shifts the AS curve to the left, there is no change in output Α. False B. True
Two firms sell identical products and compete as Cournot (price-setting) competitors in a market with a demand of p = 150 - Q. Each firm has a constant marginal and average cost of $3 per unit of output. Find the quantity each firm will produce and the price in equilibrium.
TRUE OR FALSE A few firms with market power selling an identical product and competing over price arrive to the competitive equilibrium. In an oligopoly setting, joint profits are the highest when firms act according to a Stackelberg model. In the presence of a negative externality generated by producing a good, a competitive market will produce less of that good than is socially optimal. An example of the tragedy of the commons is when farmers pump more groundwater from an...
TRUE/FALSE QUESTIONS
23. A few firms with market power selling an identical product and competing over price arrive to the competitive equilibrium. 24. In an oligopoly setting, joint profits are the highest when firms act according to a Stackelberg model. 25. In the presence of a negative externality generated by producing a good, a competitive market will produce less of that good than is socially optimal. 26. An example of the tragedy of the commons is when farmers pump more...
Problem 4. (True/False). For each statement, assert whether it is true of false and explain your answer. 1. In a finitely repeated Pure (Homogeneous Goods) Betrand game there can be more than one Subgame perfect Nash equilibrium (SPNE). 2. It not possible to support a collusive outcome in a finitely repeated Pure Betrand game. 3. In a sequential Bertrand game, the follower firm has a second mover advantage because prices are strategic complements. 4. With three identical firms, total industry...
statements as true or false. 1. All else equal, countries with more natural resources have a higher GDP per capita than those with few natural resources 2. Over the past two hundred years, improvements in productivity have offset lost productivity reduction due to less land being available. 3. The key to prosperity in the 20th century is an economy rich in natural resources. 4. Human and physical capital are only beneficial to an economy when there is an abundance of...