Problem 1: Some games of strategy are cooperative. One example is deciding which side of the road to drive on. It doesn't matter which side it is as long as everyone chooses the same side. Otherwise, everyone may get hurt.
Driver 2
Left Right
Driver 1 Left 0,0 -1000 -1000
Right -1000, -1000 0,0
a. Does either player have a dominant strategy? Explain.
b. Is there Nash equilibrium in this game? Explain
c. Why this game is called a cooperative game?
Problem 2. Explain the following
a. What is a firm's Total Revenue?
b. What is a firm's Total Cost?
c. What is a firm's Total Profits?
d. If a monopolist were to behave like a perfectly competitive firm (operating in the long run), discuss the effect.