1. 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?
2. The following payoff matric displays the profit and losses for company 1 and 2 given its own action and those of it's opponent. Each company can either pursue strategy A, B, or C. Does anybody can have a dominant strategy? Explain.
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FIRM 2
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A
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B
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C
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FIRM 1
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A
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-10,-10
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0,10
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10,20
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B
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10,0
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-20,-20
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-5,-15
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C
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20,10
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15,-5
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-30,-30
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