​Table 17-36 the Information in the Table Shows the Total Demand for Demand

question 124

Multiple Choice

​Table 17-36
The information in the table shows the total demand for water service in Takoma. Assume that there are two companies operating in Takoma. Each company that provides these services incurs an annual fixed cost of $400 and that the marginal cost of providing the service to each customer is exactly $2.00. Figures listed are for an annual service contract.
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-Refer to Table 17-36. Assume there are two profit-maximizing water service providers in this market who had formed a successful cartel. Now assume that the cartel breaks down, so that they are not able to collude on the price and quantity of service contracts to sell. How many service contracts will be sold in total when this market reaches a Nash equilibrium?

• A)​500.
• B)​600.
• C)​700.
• D)​800.

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Definitions:

Penalty Kick

A method of restarting play in soccer, awarded for certain fouls within the penalty area, where a player kicks the ball from the penalty spot aiming to score against the opposing goalkeeper alone.

Kicker's Payoffs

Term used in game theory to describe the rewards or outcomes that a player (the "kicker") stands to gain from various actions.

Probability of Success

The likelihood or chance of an event or endeavor achieving its intended outcome or goal.

Probability of Failure

This refers to the likelihood that a system or component will fail to perform its intended function within a specified period.