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- The market for dark chocolate us characterized by Cournot duopolists - Honeydukes and Wonka industries. The market demand for dark chocolate is: P = 8 - 0.005Qd where P is the price per bar in dollars and Qd is dark chocolate's daily quantity demanded in bars (use qh to represent the quantity of dark chocolate sold by Honeydukes and qw to represent the quantity of dark chocolate sold by Wonka Industries). Honeydukes has a constant marginal cost of $2.50 per bar, while Wonka Industries has a constant marginal cost of $3.00 per bar. The firms move simultaneously in choosing their profit-maximizing quantity of output. a. Given the firms move simultaneously, what is the equation for Honeydukes' reaction function with qh expressed as a function of qw? b. Given the firms move simultaneously, what is the equation for Wonka's reaction function with qw expressed as a function of qh? c. What quantity of dark chocolate will each firm produce in equilibrium and what price will be established for a…Consider any market that has a demand curve given by: Qd = 240 - 2P. Where Qd is the total quantity demanded in the market, given in millions of units and P is the market price, calculated in monetary units. Imagine that there are 2 Cournot oligopolists operating in this market with Cmg = CVme = 15 and fixed monthly costs equal to 1,400. About this market, ask yourself: a) What is the profit of each of the oligopolists? b) Imagine that one of the companies managed to implement a process innovation capable of halving its Cmg and CVme, so that they would go from 15 to 7.5. This investment implies an additional monthly expense of $1,800. Discuss the statement: "If this situation occurs, the innovative company will not implement variable cost reduction, as the quantity supplied in the market will increase very little; prices will remain very close to what they are today and its profits will not increase"Gary's Gas and Frank's Fuel are the only two providers of gasoline in their town. Below is the demand schedule for the market of gasoline. Assume that the cost of producing gasoline is 3 per gallon (AC=3, FC-D0). Suppose that the two producers collude (split production and profits evenly), what are the joint profits of these two firms? Q demanded (in gallons) 10 12 4 Market price (in dollar) $22 $20 $18 $16 $14 $12 $10 $8 $6 $0 O $27 O None of these options is correct. $55 O $72 O $36 50 00 3)
- 6. Three oligopolists operate in a market with inverse demand given by P(Q) = a - Q, where Q = 9₁ +92 +93 and q; is the quantity produced by firm i. Each firm has a constant marginal cost of production, c, and no fixed cost. The firms choose their quantities as follows: (1) firm 1 chooses q₁ ≥ 0; (2) firms 2 and 3 observe q₁ and then simultaneously choose q2 and 93, respectively. What is the subgame-perfect outcome?2. The market for dark chocolate us characterized by Cournot duopolists - Honeydukes and Wonka industries. The market demand for dark chocolate is:P = 8 - 0.005Qdwhere P is the price per bar in dollars and Qd is dark chocolate's daily quantity demanded in bars (use qh to represent the quantity of dark chocolate sold by Honeydukes and qw to represent the quantity of dark chocolate sold by Wonka Industries). Honeydukes has a constant marginal cost of $2.50 per bar, while Wonka Industries has a constant marginal cost of $3.00 per bar. The firms move simultaneously in choosing their profit-maximizing quantity of output.a. Given the firms move simultaneously, what is the equation for Honeydukes' reaction function with qh expressed as a function of qw?b. Given the firms move simultaneously, what is the equation for Wonka's reaction function with qw expressed as a function of qh?c. What quantity of dark chocolate will each firm produce in equilibrium and what price will be established for a…10. The platypus is a shy and secretive animal that does not breed well in captivity. But two breeders, Sydney and Adelaide, have discovered the secret to platypus fer- tility and have effectively cornered the market. Zoos across the globe come to them to purchase their output; the world inverse demand for baby platypuses is given avby P=1,000-20, where Q is the combined output of blu Sydney (qs) and Adelaide (qA). vide a. Sydney wishes to produce the profit-maximizing quantity of baby platypus. Given Adelaide's choice of output, 9A, write an equation for the residual demand faced by Sydney. 19125 non c. ab. Derive Sydney's residual marginal revenue curve. Assume that the marginal and average total cost of raising a baby platypus to an age at which it can be sold is $200. Derive Sydney's reaction function. d. Repeat steps (a), (b), and (c) to find Adelaide's reac- tion function to Sydney's output choice. 18 e. Substitute Sydney's reaction function into Adelaide's to solve for…
- PleaseSuppose you are employed at a monopolistic company as a research (pricing) economist and you are deriving the behavior of two markets based on demand curves given by: Di(P1) 3 50 — Pі D:(p>) — 50 — 2р2 Assume that the marginal cost is constant at $8 a unit. (a) If it can price discriminate, what price should it charge in each market in order to maximize profits? (b) If it can't price discriminate, what price should it charge?Please
- 1. Consider two duopolists who each have a constant marginal cost c = e2 = 3 and face inverse demand P = 15 – Q,where Q = Q1 + Q2 is the total output of both firms. 1. Find the Cournot equilibrium quantity for each firm, the resulting market price, and the profits for each firm. 2. Find the Stackelberg equilibrium quantities for each firm, and the price, and the profits for each firm supposing that Firm 1 is the industry leader. 3. Suppose that Firm 2 figures out a way to lower its marginal cost to ez = 0 while firm 1 still has a marginal cost equal to 1: c = 3. How does this affect the Cournot equilibrium quantities, price, and profits? 4. How does this affect the Stackelberg equilibrium (with Firm 1 still as the leader) quantities, price, and profits?The market for knitted scarves at a local, weekend farmers' market is a Stackelberg duopoly. Sammy's Scarves acts as the Stackelberg leader and Knitting Nancy as the Stackelberg follower. Both Sammy and Nancy know that the market demand for knitted scarves at the farmers' market is: Q=320-4P where Q is the quantity of knitted scarves demanded and P is the price of a knitted scarf. Solving the market demand for P as a function of Q gives the inverse market demand: P-80-0.25Q. Sammy produces qs knitted scarves, and Nancy produces q knitted scarves. Each incurs a total cost of producing q; knitted scarves of TC (91)= =30+20q Sammy will sell 140 knitted scarves and Nancy will sell 70 knitted scarves at the local, weekend farmers' market.Help me please