// LabCournotStackelbergSpecs.swift. 11/22/2020. import Foundation class LabCournotStackelbergSpecs { let strCournotModelSpecs :String = """ `` Lab Specs // Demand function and curve slider specs 20000 80000 10000 40000 // 0: Demand function constant -400 -100 50 -100 // 1: Demand function price coefficient // Cost function slider specs 0 800000 200000 0 // 2: Fixed cost 100 300 10 160 // 3: Linear cost // Firm numbers and default slider increments 1 2 3 5 15 // 4: Number of firm choices 1000 1000 500 400 100 // 5: Slider increments for each firm number 0 13000 1000 6000 // 6: Default quantity slider for // both firms in the 2 firm Cournot case // Firm 1 in the Stackleberg case // Graph - NB: 0 0 36000 400 works when labels are added 0 0 26000 400 // 7: Market graph axis specs 1000 // 8: Quantity axis scale factor `` Prob Specs ` ******** Problem 0 Start Screen 1 - Two-Firm Cartel Solution // 0: Title CournotTwoFirm // 1: Type of lab: CournotTwoFirm, CournoutNFirm, Stackelberg // Slider visibility L L // 2: Demand price intercept and slope L L // 3: Cost: Fixed, linear N // 4: Number of firms // Surplus visibility F // 5: Draw surpluses F // 6: Cournot and Stackelberg buttons // Report solutions F T F F // 7: Competitive, Cartel, Cournot, Stackelberg ` Text Start // 8: Text `RED`BLDObjective:`BLD Illustrate the cartel solution, the situation when the firms are maximizing their joint profits.`BLK Focus on the center diagram, the market diagram. `BLDQuestion:`BLD How do you know that the current screen represents the cartel solution; that is, how do you know that the cartel is as profitable as possible? Now, focus on the diagram for firm 1, but do not touch its quantity scrollbar. `BLDQuestion:`BLD Is firm 1 content; that is, could firm 1 increase its profit by producing more or less output? Check your logic by moving the firm's quantity scrollbar. `BLDQuestion:`BLD What does this suggest about the sustainablity of a cartel? ` Prob End ` ******** Problem 1 Start Screen 2 - Two-Firm Cournot Solution // 0: Title CournotTwoFirm // 1: Type of lab: CournotTwoFirm, CournoutNFirm, Stackelberg // Slider visibility L L // 2: Demand price intercept and slope L L // 3: Cost: Fixed, linear N // 4: Number of firms // Surplus visibility F // 5: Draw surpluses F // 6: Cournot and Stackelberg buttons // Report solutions F F T F // 7: Competitive, Cartel, Cournot, Stackelberg ` Text Start // 8: Text `RED`BLDObjective:`BLD Illustrate how two firms would converge upon the Cournot solution when each firm assumes that the other will not change its behavior.`BLK First, focus on firm 1. `BLDQuestion:`BLD If firm 1 assumes that firm 2 will not change the quantity it produces, would firm 1 be content? If not, how much output would firm 1 produce to maximize its profit? Second, focus on firm 2. `BLDQuestion:`BLD If firm 2 assumes that firm 1 will not change the quantity it now produces, would firm 2 be content? If not, how much output would firm 2 produce to maximize its profit? Next, return to firm 1. `BLDQuestion:`BLD If firm 1 assumes that firm 2 will not change the quantity it now produces, would firm 1 be content? If not, how much output would firm 1 produce to maximize its profit? `BLDQuestion:`BLD When the firms act in this way, do they converge to the Cournot solution? If so, how are the firms' marginal revenues and marginal costs related? ` Prob End ` ******** Problem 2 Start Screen 3 - Two-Firm Cartel, Cournot, and Competitive Solutions // 0: Title CournotNFirm // 1: Type of lab: CournotTwoFirm, CournoutNFirm, Stackelberg // Slider visibility L L // 2: Demand price intercept and slope L L // 3: Cost: Fixed, linear N // 4: Number of firms // Surplus visibility F // 5: Draw surpluses F // 6: Cournot and Stackelberg buttons // Report solutions T T T F // 7: Competitive, Cartel, Cournot, Stackelberg ` Text Start // 8: Text `RED`BLDObjective:`BLD Illustrate three types of solutions: Cartel, Cournot, and competitive.`BLK For the sake of clarity, we assume that all firms are identical and produce the same quantity of output. As we did so previously, we begin the the cartel solution. `BLDQuestion:`BLD What "marginal" conditions must be satisfied for a cartel solution? Using the quantity scrollbar for the typical firm, Firm i, increase the quantity to illustrate the Cournot solution. `BLDQuestion:`BLD What "marginal" conditions must be satisfied for a Cournot solution? `BLDQuestion:`BLD How is the cartel price related to the Cournot solution's price? How are their quantities related? Using the quantity scrollbar for the typical firm, Firm i, increase the quantity to illustrate the competitive solution. `BLDQuestion:`BLD What "marginal" conditions must be satisfied for a competitive solution? `BLDQuestion:`BLD How are the prices and quantities of the three solutions related? ` Prob End ` ******** Problem 3 Start Screen 4 - N-Firm Cournot Solution // 0: Title CournotNFirm // 1: Type of lab: CournotTwoFirm, CournoutNFirm, Stackelberg // Slider visibility L L // 2: Demand price intercept and slope L L // 3: Cost: Fixed, linear B // 4: Number of firms // Surplus visibility F // 5: Draw surpluses F // 6: Cournot and Stackelberg buttons // Report solutions T T T F // 7: Competitive, Cartel, Cournot, Stackelberg ` Text Start // 8: Text `RED`BLDObjective:`BLD Illustrate that the Cournot solution converges to the competitive solution as the number of firms increase.`BLK Initially, the industry is composed of 2 firms. Using the typical firm's quantity scrollbar, find the Cournot solution. What is the price and total production? Using the Number of Firms scrollbar, increase the number of firms from 2 to 3, from 3 to 5, and then from 5 to 15. In each case, find the Cournot equilibrium and note the price and total production. `BLDQuestion:`BLD As the number of firms increase, what happens to the price and total production? ` Prob End """ let strStackelbergModelSpecs :String = """ `` Lab Specs // Demand function and curve slider specs 20000 80000 10000 40000 // 0: Demand function constant -400 -100 50 -100 // 1: Demand function price coefficient // Cost function slider specs 0 800000 200000 0 // 2: Fixed cost 100 300 10 160 // 3: Linear cost // Firm numbers and default slider increments 1 2 3 5 15 // 4: Number of firm choices 1000 1000 500 400 100 // 5: Slider increments for each firm number 0 13000 1000 6000 // 6: Default quantity slider for // both firms in the 2 firm Cournot case // Firm 1 in the Stackleberg case // Graph 0 0 26000 400 // 7: Market graph axis specs 1000 // 8: Quantity axis scale factor `` Prob Specs ` Problem 0 Start Screen 1 - Stackelberg Model: Dynamics // 0: Title StackelbergTwoFirm // 1: Type of lab: CournotTwoFirm, CournoutNFirm, // StackelbergTwoFirm, StackebergNFirm // Slider visibility L L // 2: Demand price intercept and slope L L // 3: Cost: Fixed, linear N // 4: Number of firms // Surplus visibility F // 5: Draw surpluses F // 6: Cournot and Stackelberg buttons // Report solutions F F F T // 7: Competitive, Cartel, Cournot, Stackelberg ` Text Start // 8: Text `RED`BLDObjective:`BLD Illustrate the Stakelberg solution.`BLK Use the leader firm quantity scrollbar to increase the quantity of output produced by the leader firm gradually. `BLDQuestion:`BLD Why do the follower firm's demand and marginal revenue curves shift down? Find the Stackelberg equilibrium. `BLDQuestion:`BLD What conditions does the Stackelberg equilibrium satisfy? ` Prob End """ ` Problem 1 Start Screen 2 - Stackelberg Model: Number of Firms // 0: Title StackelbergNFirm // 1: Type of lab: CournotTwoFirm, CournoutNFirm, // StackelbergTwoFirm, StackebergNFirm // Slider visibility L L // 2: Demand price intercept and slope L L // 3: Cost: Fixed, linear B // 4: Number of firms // Surplus visibility F // 5: Draw surpluses F // 6: Cournot and Stackelberg buttons // Report solutions F F F T // 7: Competitive, Cartel, Cournot, Stackelberg ` Text Start // 8: Text `RED`BLDObjective:`BLD Illustrate that the Stackelberg solution converges to the competitive solution as the number of firms increase.`BLK Initially, the industry is composed of 2 firms. Using the leader firm's quantity scrollbar, find the Stackelberg solution. `BLDQuestion:`BLD What is the price and total production? Using the Number of Firms scrollbar, increase the number of firms from 2 to 3. `BLDQuestion:`BLD What is the price and total production now? Next, increase the number to 5 and then to 15. In each case, find the Stackelberg equilibrium. `BLDQuestion:`BLD What happens to the price and total production? `BLDSummarize:`BLD As the number of firms increase. What happens to the price and total production? ` Prob End }