Table 17-1 Imagine a Small Town in Which Only Two Residents,Abby and Residents,Abby

question 65

Essay

Table 17-1
Imagine a small town in which only two residents,Abby and Brad,own wells that produce safe drinking water.Each week Abby and Brad work together to decide how many gallons of water to pump.They bring water to town and sell it at whatever price the market will bear.To keep things simple,suppose that Abby and Brad can pump as much water as they want without cost so that the marginal cost is zero.The weekly town demand schedule and total revenue schedule for water is shown in the table below:

-Refer to Table 17-1.Discuss the difference between the monopoly outcome and the Nash equilibrium.

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An accounting practice where purchases are recorded at their full invoice amount without taking deductions for discounts.

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