EC120 Lecture Notes - Lecture 15: Strategic Dominance, Monopolistic Competition, Nash Equilibrium
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Use mr and mc to find profit maximizing prices if firm can price discriminate between workers and tourists. Use mr and mc to find profit maximizing price if firm can"t price discriminate between workers and tourists. A cartel is a group of firms that agree to maxmize the sum of member profits (joint profits) If all firms join the cartel then the cartel produces at the monopoly level by . Setting industry mr = industry mc (mci) Mci is dervived by equating mc across firms. Using quotas to restrict output of each firm. Deterring the entry of non member firms. No entry barriers =0 in lr. Firms act as price setters no supply curve. Number of firms adjusts to yield zero profits. Firm acts as a price setter no supply curve. Producing where mr = mc and setting p>mc. Assuming that rivals are also maximizing profits.
