Hello Brainmass Staff
I would be very grateful to the OTA who can HELP me with the attached simple economics problems. Most of these questions require very short and simple answers and explanations.
By completing these steps you will be providing me with a valuable study guide to use so I will be able to solve problems such as these in the future.
PLEASE make sure to DO ALL OF THE STEPS in the problem. Do not make the EXPLANATIONS complicated on how the ANSWERS were found.
I need something short and sweet and to the point to INCLUDE the ANSWER to ALL OF THE STEPS.
Please make sure to do all of the indicated steps.
1 a. Your idea that there is a dominant strategy is correct, but dominant strategy is not one of the oligopoly models.
The correct answer should be Cournot model. Cournot model describes the situation where you have two equally strong firms and they compete by setting their own quantities of production (independently of the others decision). In here, increase advertising implies selling more quantities. So you can see that both firms wants to sells more quantities but both are better off from selling less quantities (ie maintaining a monopoly ...