Economic Analysis of Monopoly Pricing and Strategic Game Theory: Problem Set 4
A completed problem set on monopoly pricing and strategic game theory.
Dylan Price
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ECON 213
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MAY GET CAUGHT IN
PLAGIARISM
ECONOMIC ANALYSIS OF MONOPOLY PRICING AND STRATEGIC
GAME THEORY: PROBLEM SET 4
S
PROBLEM SET 4
Name: _____ _________________________________
Problem Set 4 is due by 11:59 p.m. (ET) on Friday of Module/Week 8.
1. Monopolies can sometimes find themselves in difficult financial situations that lead to losses.
Suppose Mr. Burns’ power company has a monopoly for providing electricity in Springfield.
His costs of upkeep are so high that he is consistently losing money.
a.) Show this outcome in a completely labeled graph. Clearly identify all parts of your graph,
including the best price and output for the firm as well as the losses.
Page 1 of 5
DO NOT COPY EXACTLY.
MAY GET CAUGHT IN
PLAGIARISM
ECONOMIC ANALYSIS OF MONOPOLY PRICING AND STRATEGIC
GAME THEORY: PROBLEM SET 4
S
PROBLEM SET 4
Name: _____ _________________________________
Problem Set 4 is due by 11:59 p.m. (ET) on Friday of Module/Week 8.
1. Monopolies can sometimes find themselves in difficult financial situations that lead to losses.
Suppose Mr. Burns’ power company has a monopoly for providing electricity in Springfield.
His costs of upkeep are so high that he is consistently losing money.
a.) Show this outcome in a completely labeled graph. Clearly identify all parts of your graph,
including the best price and output for the firm as well as the losses.
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Subject
Economics