# Oligopoly and monopolistic competition and product differentiation

Unit 8 Assignment: Oligopoly and Monopolistic Competition and Product Differentiation

Problem

Dr. Fine and Dr. Feelgood are the only two medical doctors offering immediate walk-in medical services in the town of Springfield. That is, they operate in a duopoly. Each doctor can charge either a high price or a low price for a standard medical visit. The accompanying matrix shows their payoffs, in profits per patient (in dollars), for any choice that the two doctors can make.

(((PLEASE SEE ATTACHMENT WORD DOCUMENT WHICH SHOWS TABLE)))

1.    Suppose the two doctors play a one-shot game—that is, they interact only once and never again. What will be the Nash (non-cooperative) equilibrium in this one-shot game?

2.    Now suppose the two doctors play this game twice. Also, suppose each doctor can play one of two strategies: it can play either “always charge the low price” or “tit for tat”— that is, it starts off charging the high price in the first period, and then in the second period it does whatever the other doctor did in the previous period. Write down the payoffs to Dr. Fine from the following four possibilities:

a.    Dr. Fine plays “always charge the low price” when Dr. Feelgood also plays “always charge the low price.”

 FIRST Period Payoffs SECOND Period Payoffs TOTAL Payoffs Charges (high or low) Charges (high or low) Fine Fine Feelgood Feelgood

b.   Dr. Fine plays “always charge the low price” when Dr. Feelgood plays “tit for tat.”

 FIRST Period Payoffs SECOND Period Payoffs TOTAL Payoffs Charges (high or low) Charges (high or low) Fine Fine Feelgood Feelgood

c.    Dr. Fine plays “tit for tat” when Dr. Feelgood plays “always charge the low price.”

 FIRST Period Payoffs SECOND Period Payoffs TOTAL Payoffs Charges (high or low) Charges (high or low) Fine Fine Feelgood Feelgood

d.    Dr. Fine plays “tit for tat” when Dr. Feelgood also plays “tit for tat.”

 FIRST Period Payoffs SECOND Period Payoffs TOTAL Payoffs Charges (high or low) Charges (high or low) Fine Fine Feelgood Feelgood

1. “In the long run, there is no difference between monopolistic competition and perfect competition.”

Discuss whether this statement is true, false or ambiguous with respect to each of the criteria listed under a, b, c, and d. Justify your answers.

a. The price charged to consumers

b. The average total cost of production

c. The efficiency of the market outcome

d. The typical firm’s profit in the long run

———————

References:

Pages (550 words)
Approximate price: -

Why Work with Us

Top Quality and Well-Researched Papers

We always make sure that writers follow all your instructions precisely. You can choose your academic level: high school, college/university or professional, and we will assign a writer who has a respective degree.

We have a team of professional writers with experience in academic and business writing. Many are native speakers and able to perform any task for which you need help.

Free Unlimited Revisions

If you think we missed something, send your order for a free revision. You have 10 days to submit the order for review after you have received the final document. You can do this yourself after logging into your personal account or by contacting our support.

Prompt Delivery and 100% Money-Back-Guarantee

All papers are always delivered on time. In case we need more time to master your paper, we may contact you regarding the deadline extension. In case you cannot provide us with more time, a 100% refund is guaranteed.

Original & Confidential

We use several writing tools checks to ensure that all documents you receive are free from plagiarism. Our editors carefully review all quotations in the text. We also promise maximum confidentiality in all of our services.

Our support agents are available 24 hours a day 7 days a week and committed to providing you with the best customer experience. Get in touch whenever you need any assistance.

Try it now!

## Calculate the price of your order

Total price:
\$0.00

How it works?

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Our Services

No need to work on your paper at night. Sleep tight, we will cover your back. We offer all kinds of writing services.

## Essay Writing Service

No matter what kind of academic paper you need and how urgent you need it, you are welcome to choose your academic level and the type of your paper at an affordable price. We take care of all your paper needs and give a 24/7 customer care support system.