Is a repeated-or single-period game more appropriate for the study of oligopolies? In which setting is collusion more likely to be a stable outcome? Explain your answer.
Answer to relevant QuestionsIn the lemons model, there is only one price even though the products differ in quality. Why is that? What factors deter-mine that price? How does the price affect the quantities traded of the different quality goods?Use a diagram to illustrate the “hoped for” result of natural monopoly regulation that attempts to set a price equal to average cost. What are the difficulties in achieving this out-come? Would an unregulated natural ...What factors (other than the wage rate) affect the amount of labor a firm that operates in perfectly competitive output markets will hire? How will a change in each of these factors affect the firm’s demand curve for labor?Discuss the determination of equilibrium input price and employment by a competitive industry. Concerning the equilibrium, firms would prefer to pay less for an input; why don’t they? Input owners would prefer to receive a ...In equilibrium, the interest rate equates the willingness of people to give up present goods in return for future goods and the ability of the economy to transform present goods into future goods. Explain.
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