There are two firms whose factories sit alongside a lake. It costs each firm $2,550.00 to...

 

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There are two firms whose factories sit alongside a lake. It costs each firm $2,550.00 to install filters to avoid polluting the lake. Because both firms utilize the lake's water to produce goods, a polluted lake hurts their production process and increases their costs. Assume that the cost to each firm of a polluted lake is $1700.00 times the number of polluting firms. Fill in the cost matrix based on the above information. Note: Include negative signs because this problem refers to costs. Firm 1 Pollute Use Filter Part 2 (1 point) Pollute Which of the following are true about the equilibrium in a one-shot game? Choose one or more: OA. The equilibrium is not Pareto optimal. OB. Only firm 2 pollutes. OC. Both firms pollute. OD. Only firm 1 pollutes. OE. Neither firm pollutes. Firm 2 Use Filter There are two firms whose factories sit alongside a lake. It costs each firm $2,550.00 to install filters to avoid polluting the lake. Because both firms utilize the lake's water to produce goods, a polluted lake hurts their production process and increases their costs. Assume that the cost to each firm of a polluted lake is $1700.00 times the number of polluting firms. Fill in the cost matrix based on the above information. Note: Include negative signs because this problem refers to costs. Firm 1 Pollute Use Filter Part 2 (1 point) Pollute Which of the following are true about the equilibrium in a one-shot game? Choose one or more: OA. The equilibrium is not Pareto optimal. OB. Only firm 2 pollutes. OC. Both firms pollute. OD. Only firm 1 pollutes. OE. Neither firm pollutes. Firm 2 Use Filter

Answer rating: 100% (QA)

A The equilibrium is not Pareto optimal This is true because a Pareto optimal outcome is one where a... View the full answer