Table 17-31 Imagine a Small Town in a Remote Area Where Only

question 263

Essay

Table 17-31
Imagine a small town in a remote area where only two residents, Maria and Miguel, own dairies that produce milk that is safe to drink. Each week Maria and Miguel work together to decide how many gallons of milk to produce. They bring milk to town and sell it at whatever price the market will bear. To keep things simple, suppose that Maria and Miguel can produce as much milk as they want without cost so that the marginal cost is zero. The weekly town demand schedule and total revenue schedule for milk is shown in the table below:
-Refer to Table 17-31. Briefly explain why each duopolist earns a lower profit at the Nash equilibrium than if they cooperated to produce the monopoly output.

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Definitions:

Applied Behavior Analysis

A systematic approach to understanding behavior and applying interventions based on principles of behaviorism, often used in educational and therapeutic settings to improve or modify behaviors.

Behavior Modification

A treatment approach, based on the principles of operant conditioning, that replaces undesirable behaviors with more desirable ones through positive or negative reinforcement.

Behaviorism

A scientific approach to understanding human and animal behavior, focusing on observable and measurable behaviors rather than mental processes.

Reinforcement

In behavior psychology, a stimulus which increases the likelihood of a preceding behavior to occur again.