(3) A price discriminating monopolist produces two products that exhibit the following price elasticities of demand: E1= -2.2 and E2= -3.0. For good one (G1) he will charge a price of P1=$12. What should he charge for good 2? (4) The following payoff matric displays the profit and losses for company 1 and 2 given its own action and those of itâs opponent. Each company can either pursue strategy A, B, or C. Does anybody can have a dominant strategy? Explain. FIRM 2 A B C FIRM 1 A -10,-10 0,10 10,20 B 10,0 -20,-20 -5,-15 C 20,10 15,-5 -30,-30
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Intermediate Microeconomics
price discrimination & basic game theory
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