What is the equilibrium strategy for each firm in a duopolists' dilemma and why do the firms not succeed in colluding to raise the price and profits?
What will be an ideal response?
Each firm sees that its own profit is higher if it cheats on the agreement, and this strategy is best regardless of how any of the other firms act. This motivates all firms to cheat, and they all suffer an outcome that is far less profitable than if they all had complied with the agreement.
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Policies adopted by the Truman administration effectively avoided inflation during the Korean War. These policies included:
a. increased personal and corporate tax rates. b. price and wage controls. c. reduced purchases of government debt by the Federal Reserve. d. discontinuance of the practice of "pegging" interest rates. e. All of the above.
Price elasticity
A) is impossible to calculate. B) can only be calculated with the experience of management. C) can be calculated with PIMS data. D) none of these choices.