Question 1

Compare the models analyzed here with reference to the consumer and economic efficiency.

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Question 2

If the town was one restaurant below its optimal number when you are brought in as a consultant to help decide some planning issues, and the city fathers want to know how much the town could save overall if it built another restaurant, what would you tell them?

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Question 3

What is the rate at which transportation costs are falling when the optimal number of restaurants is reached?

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Question 4

If the town projected a total population of 180 by the end of the decade, how many restaurants would the city planners project as optimal for the end of the decade?

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Question 5

If the lower right cell has 85's for each company instead of 70's, would either have a dominant strategy then?

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Question 6

Sketch graph two total cost curves as functions of the number of restaurants.The first one is the total cost of meals per day and the second is the total cost of transportation per day.Plot five points for each curve.

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Question 7

Does either airline have a dominant strategy? Explain.

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Question 8

If firm 1 is a Stackelberg leader and firm 2 is a follower, what will each firm produce?

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Question 9

Beginning from the initial population of 81, how high would the cost per mile have to go before the optimal number of restaurants would be one more than it was with transportation costs at $10 per mile?

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Question 10

On your graph, vertically sum the two total cost curves and show what the optimal number of restaurants should be.Use the five points calculated to sum the total cost curves.

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Question 11

Is there a Nash equilibrium?

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Question 12

What price will the two Stackelberg firms charge?

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Question 13

Calculate the optimal number of restaurants without using the graph.Show your work.

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Question 14

Gasoline comes in octane levels from 87 to 93.Supposedly, higher octane leads to less engine repair, but it costs more to produce.Sketch a total cost function for each of these two factors and a vertically summed total for both costs.On your sketch graph, show the appropriate octane level that will be produced.(Do not use numerical values on the graph except for the octane levels.)

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Question 15

What will be the price and quantity of this duopoly market if the duopolists act as shared monopolists?

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Quiz 13: Imperfect Competition: a Game-Theoretic Approach