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ECO Problem Set 4-Movies are distributed in a variety of forms, not just first run theatrical presentations




Question;Problem Set 4;Name;1.;Movies;are distributed in a variety of forms, not just first run theatrical;presentations. What other ways are movies distributed? What are the different;price points? Using this information, draw a fully labeled graph of the market;for movies in which the distributor of the film price discriminates. (NOTE: This;should not be perfect price discrimination.);2.;Assume;the following game is played one time only. Based on the information in the;payoff matrix, PNC Bank and Citizens Bank are considering an implicit collusive;agreement on interest rates. Payoffs to the two firms are represented in terms;of profits in thousands of dollars;Citizens Bank;Collude: Raise Rates;Defect: Keep Rates where they are;PNC;Collude: Raise Rates;(900;600);(700;800);Defect: Keep Rates where they are;(1100;300);(800,400);a.;Does PNC have a dominant strategy? What is it? Does Citizens have a dominant;strategy? What is it?;b.;Does the result of your answer change if the game is played an infinite number;of times? Why or why not. Properly use game theoretic terminology in your;answer.;3.;What;is the profit maximizing output of the monopolist shown below?;What;price do they set?;What;is the mark up over cost?;Why;will this price not fall?;4.;Draw;the cheese market for the United States showing the world price as the price;for this market. How much cheese does the U.S. import at the world price? Now;assume that the cheese lobby promotes and successfully gains a tariff on;cheese. What happens to the price paid by cheese lovers in the U.S.? How does;this change the value generated by the market? Why do you say this? Where does;this appear in your graph?


Paper#55407 | Written in 18-Jul-2015

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