Consider a Leader-Follower duopoly, the firms face an (inverse) demand function: Pb = 530 - 17 Qb.The marginal cost for firm 1 (The Leader) is given by mc1 = 12 Q.The marginal cost for firm 2 (The Follower) is given by mc2 = 9 Q. (Assume firm 1 has a fixed cost of $ 157 and firm 2 has a fixed cost of $ 113 .) What are the profits of firm 2? Answer: 41.92

Consider the Cournot competition between two firms with different marginal costs. For firm 1, let the cost function be: C1(q1)-3*q1 For firm 2, let the cost function be: C2(q2)-6*q2 The inverse demand function is: P(Q)=12-Q, where Q=q1+q2 In this game, write down the profit functions for firm 1 and firm 2 (as functions of q1 and q2). Then, find the Nash equilibrium quantities for firm 1 and firm 2. In the NE, which firm produces more: the one with the low or the high marginal cost? Note: To get credit, you need to show your calculations and explain your answer.

Two firms A and B produce an identical product (Note: Industry Output = Q). The firms have to decide how much output qA and qB  (Note: qA = Firm A Output; qB =  Firm B Output) they must produce since they are the only two firms in the industry that manufacture this product. Their marginal cost (MC) is equal to their average cost (AC) and it is constant at MC = AC = X, for both firms.  Market demand is given as Q = Y – 2P (where P = price and Q = quantity).  Select any value for X between [21 – 69] and any value for Y between [501 – 999].  Using this information, calculate the Industry Price, Industry Output, Industry Profit, Consumer Surplus and Deadweight Loss under each of the following models; 1)Cournot Model  2) Bertrand Model  3) Tacit Collusion Model.

Two firms A and B produce an identical product (Note: Industry Output = Q). The firms have to decide how much output qA and qB  (Note: qA = Firm A Output; qB =  Firm B Output) they must produce since they are the only two firms in the industry that manufacture this product. Their marginal cost (MC) is equal to their average cost (AC) and it is constant at MC = AC = X, for both firms.  Market demand is given as Q = Y – 2P (where P = price and Q = quantity).  Select any value for X between [21 – 69] and any value for Y between [501 – 999].  Using this information, calculate the Industry Price, Industry Output, Industry Profit, Consumer Surplus and Deadweight Loss under each of the following model: (A) tacit collusion model

Two firms A and B produce an identical product (Note: Industry Output = Q). The firms have to decide how much output qA and qB  (Note: qA = Firm A Output; qB=  Firm B Output) they must produce since they are the only two firms in the industry that manufacture this product. Their marginal cost (MC) is equal to their average cost (AC) and it is constant at MC = AC = X, for both firms.  Market demand is given as Q = Y – 2P (where P = price and Q = quantity).  Select any value for X between [21 – 69] and any value for Y between [501 – 999].  Using this information, calculate the Industry Price, Industry Output, Industry Profit, Consumer Surplus and Deadweight Loss under each of the following models; 1) Bertrand model

Two firms A and B produce an identical product (Note: Industry Output = Q). The firms have to decide how much output qA and qB  (Note: qA = Firm A Output; qB =  Firm B Output) they must produce since they are the only two firms in the industry that manufacture this product. Their marginal cost (MC) is equal to their average cost (AC) and it is constant at MC = AC = X, for both firms.  Market demand is given as Q = Y – 2P (where P = price and Q = quantity).  Select any value for X between [21 – 69] and any value for Y between [501 – 999].  Using this information, calculate the Industry Price, Industry Output, Industry Profit, Consumer Surplus and Deadweight Loss under each of the following models: 1) Cournor Model 2) Bertrand Model 3) Tacit collusion Model

Two firms A and B produce an identical product (Note: Industry Output = Q). The firms have to decide how much output qA and qB  (Note: qA = Firm A Output; qB =  Firm B Output) they must produce since they are the only two firms in the industry that manufacture this product. Their marginal cost (MC) is equal to their average cost (AC) and it is constant at MC = AC = X, for both firms.  Market demand is given as Q = Y – 2P (where P = price and Q = quantity).  Select any value for X between [21 – 69] and any value for Y between [501 – 999].  Using this information, calculate the Industry Price, Industry Output, Industry Profit, Consumer Surplus and Deadweight Loss under each of the following models:       (a) Cournot Model         (b) Bertrand Model        (c) Tacit Collusion Model.

Suppose a market is served by two firms (a duopoly) The market demand function given by P = 1200 - O_{1} - O_{2} where is the output produced by firm 1 and is the output produced by firm 2 Q_{1}*Q_{2} Firm I's cost of production is given by the function C(Q_{1}) = 120Q_{1} and firm 2's cost of production is given by the function C(Q_{2}) = 120Q_{2} The average cost of firm is given by A*C_{1} = 120 and the average cost of firm 2 is given by A*C_{2} = 120 Marginal profit function for firm 1 (d*pi_{1})/(Delta*Q_{1}) = 1080 - 2Q_{1} - Q_{2} Marginal profit function for firm 2 (Delta*pi_{2})/(Delta*Q_{2}) = 1080 - Q_{1} - 2Q_{2} What will be the equilibrium profit levels earned by the stackelberg leader firm and the stackelberg follower firm?

Since you know all about perfect competition, monopoly, and oligopoly, we can find out how various types of firms might feel about uncertainty concerning the prices of its factors of production and output. Consider a profit-maximizing firm that produces a single good from several factors. The firm is characterized by a production function y = f(x1, ... , Xn), where y is the level of output obtainable from factor inputs x1, ... , Xn. We will use p to denote the price of the output good, and Wi to denote the price of factor input i. When there is uncertainty a priori about these prices, the firm is allowed to choose its production plan after any uncertainty in prices resolves. (c) Finally, consider this question in the context of a von Stackelberg duopoly. Two firms produce an undifferentiated commodity for which demand is given by P = A - X, where P is price and X is total supply. Demand-is unchanging. Each firm has production technology with a fixed cost F for producing anything at…

Gamma and Zeta are the only two widget manufacturers in the world. Each firm has a cost function given by: C(q) = 10+20q + q^2, where q is number of widgets produced. The market demand for widgets is represented by the inverse demand equation: P = 200 - 2Q where Q = q1 + q2 is total output. Suppose that each firm maximizes its profits taking its rival's output as given (i.e. the firms behave as Cournot oligopolists). a) What will be the equilibrium quantity selected by each firm? What is the market price? What is the profit level for each firm? Equilibrium quantity for each firm__ price__ profit__ b) It occurs to the managers of Gamma and Zeta that they could do a lot better by colluding. If the two firms were to collude in a symmetric equilibrium, what would be the profit-maximizing choice of output for each firm? What is the industry price? What is the profit for each firm in this case? Equilibrium quantity for each firm__ price__ profit__ c) What minimum discount factor is required…