If a duopolists' collusive price-fixing game can be played repeatedly,
A) one possible equilibrium is that both firms cheat.
B) players can signal their willingness to cooperate.
C) players can punish cheaters in the following game.
D) All of the above answers are correct.
D
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Assume that the supply curve is horizontal because marginal cost is constant at $10. John, Robert, and Jimmy each value one compact disc at $20 but only Jimmy and John value a second compact disc (Jimmy at $5 and John at $15). If a social planner dictates that five compact discs be produced and distributed to John, Robert, and Jimmy, then even if the compact discs are allocated based on demand, this market will lose out on $___ of value.
a. $5. b. $10. c. $15. d. There will be no lost value as five compact discs is the efficient level..
Which of the following would NOT be a result of a contractionary monetary policy?
A. Interest rates would rise. B. Imports would rise. C. Net exports would decline. D. Foreign goods would become more expensive to U.S. residents.