Summary
Summary Econ 2014 Chapter 11
- Course
- Institution
Summary of 3 pages for the course Economics at SUN (Chapter 11)
[Show more]
Seller
Follow
Ejabiro
Reviews received
Content preview
ExtraClassesStb 2014...Helping you succeed
Onafhanklik van Stellenbosch Universiteit/ Independent of Stellenbosch University
Economics 214 summary: Microeconomics
Chapter 11: Imperfect competition
Dominant strategy:
Page | 1
Best strategy for a player regardless of what strategy the other player chooses.
Dominant strategy Equilibrium / Dominante Strategie-ewewig:
Uitkoms van `n spel waarin die firma sy beste doen ongeag die aksies van sy mededinger. (minstens een
speler speel sy dominante strategie in ewewig) / Outcome of a game in which each firm is doing the best it
can regardless of what its competitor is doing.(at least one player play his dominant strategy in
equilibrium)
Nash-equilibrium / Nash-ewewig:
Stel strategieë of aksies waarin elke firma sy beste doen gegewe die aksies van sy mededinger.
Kombinasie van stategieë sodat nie een van spelers insentief het om van strategie te verander nie./ Set of
strategies or actions in which each firm does the best it can given its competitor`s actions. Combination of
strategies that neither player have an incentive to change their strategy.
Cournot model:
Oligopoly model in which firms produce a homogenous good, each firm treats output of it`s competitors
as fixed, and all firms decide simultaneously how much to produce.
Choosing quantities:
Market demand: P = a – b(Q1 + Q2)
P1 = a – bQ2 – bQ1 TR1 = P*Q1 = [a – b(Q1 + Q2)]*Q1
MR1 = a – bQ2 – 2bQ1
if MC = 0
MR1 = MC → Q1 = (a – bQ2)/2b (reaction curve for firm 1) ……………(1)
Q2 = (a – bQ1)/2b (reaction curve for firm 2)………………………………(2)
Put (2) into (1) to solve the equilibrium quantity for firm 1 and then use the equilibrium quantity of firm 1
to calculate that of firm 2.
Do you struggle with Economics 214? We want to help you succeed. Contact us at queries@extraclassesstb.co.za or
visit our website at www.extraclassesstb.co.za.
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller Ejabiro. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $2.84. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
72042 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now