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mLine 62:
Line 62: − After answering question 6, then answer two of these three questions:
Economics Homework Nine - Model (view source)
Revision as of 04:36, November 18, 2009
, 04:36, November 18, 2009→Honors
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:[Teacher's Note: Unfortunately, there is a mistake in the ordering of the paired numbers used in this problem, which I realized only after grading the answers. The numbers were in the wrong order because a firm's profits should increase, not decrease, under this situation. All students correctly realized that the equilibrium must be where the profits are equal, either (50,50) or (75,75). If the profits increased for each firm when it increases profits, then the equilibrium would be (50,50), which would be the correct answer on an exam. But under the numbers provided, firms increase profits by reducing output, and (75,75) is the correct answer.]
:[Teacher's Note: Unfortunately, there is a mistake in the ordering of the paired numbers used in this problem, which I realized only after grading the answers. The numbers were in the wrong order because a firm's profits should increase, not decrease, under this situation. All students correctly realized that the equilibrium must be where the profits are equal, either (50,50) or (75,75). If the profits increased for each firm when it increases profits, then the equilibrium would be (50,50), which would be the correct answer on an exam. But under the numbers provided, firms increase profits by reducing output, and (75,75) is the correct answer.]