Homework Answers
"D"
Both Saudi Arabia and the rest of the OPEC will disobey the quota, starting from the point of obeying both will be making low profit, the one disobeying will make a larger profit so both of them will disobey and end up making smaller profits.
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QUESTION 17 Saudi Arabia disobey cartel quota obey cartel quota SA earns low profits; OPEC earns...
Suppose OPEC has only two producers, Saudi Arabia and Nigeria Saudi Arabia has far more oil...
Suppose OPEC has only two producers, Saudi Arabia and Nigeria Saudi Arabia has far more oil reserves and is the lower cost producer compared to Nigeria. The payoff matrix in the table to the right shows the profits earned per day by each country. "Low output corresponds to producing the OPEC assigned quota and "high output corresponds to producing the maximum capacity beyond the assigned quota. What is the Nash equilibrium in this game? O A. There is no Nash...
Suppose OPEC has only two producers, Saudi Arabia and Nigeria. Saudi Arabia has far more oil...
Suppose OPEC has only two producers, Saudi Arabia and Nigeria. Saudi Arabia has far more oil reserves and is the lower cost producer compared to Nigeria. The payoff matrix in the table below shows the profits earned per day by each country. "Low output" corresponds to producing the OPEC assigned quota and "high output" corresponds to producing the maximum capacity beyond the assigned quota. Low Saudi Arabia's (SA) output Low High SA: $200M profit SA: $180M profit N: $15M profit...
Consider the market for oil. Suppose for simplicity that there are only two oil producing countries—Saudi...
Consider the market for oil. Suppose for simplicity that there are only two oil producing countries—Saudi Arabia and Kuwait. Both countries must choose whether to produce a low output or a high output. Kuwait Low Output High Output These output strategies with corresponding profits are depicted in the payoff matrix to the right. Kuwait's profits are in red and Saudi Arabia's are in blue. $120 Suppose the two countries form a cartel. What is the cooperative equilibrium? $70 Low Output...
What is the Nash equilibrium for this game? A. A Nash equilibrium does not exist for this game. B.The Nash equilibrium...
What is the Nash equilibrium for this game?
A.
A Nash equilibrium does not exist for this game.
B.The Nash equilibrium is for Saudi Arabia to produce a low
output and Kuwait to produce a high output
C.The Nash equilibrium is for Saudi Arabia to produce a high
output and Kuwait to produce a high output.
D.
The Nash equilibrium is for Saudi Arabia to produce a low output
and Kuwait to produce a low output.
E.
The Nash equilibrium...
What is the Nash equilibrium for this game? A. A Nash equilibrium does not exist for this game. B. The Nash equilibriu...
What is the Nash equilibrium for this game?
A.
A Nash equilibrium does not exist for this game.
B.
The Nash equilibrium is for Saudi Arabia to produce a low output
and Kuwait to produce a high output.
C.
The Nash equilibrium is for Saudi Arabia to produce a high
output and Kuwait to produce a high output.
D.
The Nash equilibrium is for Saudi Arabia to produce a low output
and Kuwait to produce a low output.
E.
The...
Consider the market for oil. Suppose for simplicity that there are only two oil producing countries—Saudi...
Consider the market for oil. Suppose for simplicity that there are only two oil producing countries—Saudi Arabia and Kuwait. Both countries must choose whether to produce a low output or a high output These output strategies with corresponding profits are depicted in the payoff matrix to the right. Kuwait's profits are in red and Saudi Arabia's are in blue, Suppose the two countries for a cartel. What is the cooperative equilibrium? Kuwait Low Output High Output $125 $70 Low Output...
Firms A and B form a cartel. Once the cartel is formed, each firm has the option of either comply...
Firms A and B form a cartel. Once the cartel is formed, each firm has the option of either complying with its cartel agreement by keeping its price high and its production low or cheating on the agreement by lowering its price and increasing its production. The adjacent payoff matrix shows the firms' economic profits. Firm B Comply Cheat If the game is played only once, what is the Nash equilibrium? Firm B: $600 Firm B: $900 Comply A. The...
EOC 8.1.3 Question Help Firms A and B form a cartel. Once the cartel is formed,...
EOC 8.1.3 Question Help Firms A and B form a cartel. Once the cartel is formed, each firm has the option of either complying with its cartel agreement by keeping its price high and its production low or cheating on the agreement by lowering its price and increasing its production. The adjacent payoff matrix shows the firms' economic profits. Firm B Comply Cheat If the game is played only once, what is the Nash equilibrium? Firm B: $500 Firm B:...
3. A New York Times article (5/9/88) reported that according to the International Energy Agency "oil...
3. A New York Times article (5/9/88) reported that according to the International Energy Agency "oil production by OPEC rose to 18.2 million barrels/day in April from 17.7 m. barrels in March." Part of this increase was attributed to Iraq's refusal to sign the group's production sharing program and its subsequent increase in output to 2.6 m. barrels/day. OPEC's other 12 members however cooperated with their agreements and produced close to their agreed upon quota. Suppose we could model this...
Question 1: 20 pts Little Kona is a small coffee company that is considering entering a...
Question 1: 20 pts Little Kona is a small coffee company that is considering entering a market dominated by Big Brew. Each company’s profit depends on whether Little Kona enters and whether Big Brew sets a high price or a low price. If Little Kona enters and Big Brew sets a high price, Little Kona makes $2 million and Big Brew makes $3 million. If Little Kona enters and Big Brew sets a low price, Little Kona loses $1 million...
Suppose OPEC has only two producers, Saudi Arabia and Nigeria Saudi Arabia has far more oil reserves and is the lower cost producer compared to Nigeria. The payoff matrix in the table to the right shows the profits earned per day by each country. "Low output corresponds to producing the OPEC assigned quota and "high output corresponds to producing the maximum capacity beyond the assigned quota. What is the Nash equilibrium in this game? O A. There is no Nash...
Suppose OPEC has only two producers, Saudi Arabia and Nigeria. Saudi Arabia has far more oil reserves and is the lower cost producer compared to Nigeria. The payoff matrix in the table below shows the profits earned per day by each country. "Low output" corresponds to producing the OPEC assigned quota and "high output" corresponds to producing the maximum capacity beyond the assigned quota. Low Saudi Arabia's (SA) output Low High SA: $200M profit SA: $180M profit N: $15M profit...
Consider the market for oil. Suppose for simplicity that there are only two oil producing countries—Saudi Arabia and Kuwait. Both countries must choose whether to produce a low output or a high output. Kuwait Low Output High Output These output strategies with corresponding profits are depicted in the payoff matrix to the right. Kuwait's profits are in red and Saudi Arabia's are in blue. $120 Suppose the two countries form a cartel. What is the cooperative equilibrium? $70 Low Output...
What is the Nash equilibrium for this game?
A.
A Nash equilibrium does not exist for this game.
B.The Nash equilibrium is for Saudi Arabia to produce a low
output and Kuwait to produce a high output
C.The Nash equilibrium is for Saudi Arabia to produce a high
output and Kuwait to produce a high output.
D.
The Nash equilibrium is for Saudi Arabia to produce a low output
and Kuwait to produce a low output.
E.
The Nash equilibrium...
What is the Nash equilibrium for this game?
A.
A Nash equilibrium does not exist for this game.
B.
The Nash equilibrium is for Saudi Arabia to produce a low output
and Kuwait to produce a high output.
C.
The Nash equilibrium is for Saudi Arabia to produce a high
output and Kuwait to produce a high output.
D.
The Nash equilibrium is for Saudi Arabia to produce a low output
and Kuwait to produce a low output.
E.
The...
Consider the market for oil. Suppose for simplicity that there are only two oil producing countries—Saudi Arabia and Kuwait. Both countries must choose whether to produce a low output or a high output These output strategies with corresponding profits are depicted in the payoff matrix to the right. Kuwait's profits are in red and Saudi Arabia's are in blue, Suppose the two countries for a cartel. What is the cooperative equilibrium? Kuwait Low Output High Output $125 $70 Low Output...
Firms A and B form a cartel. Once the cartel is formed, each firm has the option of either complying with its cartel agreement by keeping its price high and its production low or cheating on the agreement by lowering its price and increasing its production. The adjacent payoff matrix shows the firms' economic profits. Firm B Comply Cheat If the game is played only once, what is the Nash equilibrium? Firm B: $600 Firm B: $900 Comply A. The...
EOC 8.1.3 Question Help Firms A and B form a cartel. Once the cartel is formed, each firm has the option of either complying with its cartel agreement by keeping its price high and its production low or cheating on the agreement by lowering its price and increasing its production. The adjacent payoff matrix shows the firms' economic profits. Firm B Comply Cheat If the game is played only once, what is the Nash equilibrium? Firm B: $500 Firm B:...
3. A New York Times article (5/9/88) reported that according to the International Energy Agency "oil production by OPEC rose to 18.2 million barrels/day in April from 17.7 m. barrels in March." Part of this increase was attributed to Iraq's refusal to sign the group's production sharing program and its subsequent increase in output to 2.6 m. barrels/day. OPEC's other 12 members however cooperated with their agreements and produced close to their agreed upon quota. Suppose we could model this...
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