Consider a market with two firms, facing the demand function: p = 120 – Q. Firms...

Consider a market with two firms, facing the demand function: p = 120 – Q. Firms are producing their output at constant MC=AC=20.

If the firms are playing this game repetitively for infinite number of times, find the discount factor that will enable cooperation given the firms are playing grim trigger strategy.

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Rahul Sunny answered 9 months ago

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