Additional Problem 3: Assume two companies (C and D) are Cournot duopolists that produce identical products. Demand for the products is given by the following linear demand function: ? = 600 − ?C − ?D where ?C and ?D are the quantities sold by the respective firms and P is the price. Total cost functions for the two companies are ??C= 25,000 +100?C 2 ??D = 20,000 + 125?D c. Determine the equilibrium price and quantities sold by each firm. d.Determine the profits for the market as well as eachfirm.
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Assume two companies (C and D) are Cournot duopolists that produce identical products.
Demand for the products is given by the following linear demand function:
? = 600 − ?C − ?D
where ?C and ?D are the quantities sold by the respective firms and P is the price. Total cost
functions for the two companies are
??C= 25,000 +100?C
??D = 20,000 + 125?D
c. Determine the
d.Determine the profits for the market as well as eachfirm.
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- Assume the inverse demand function in a market is given by P(Q) = 500 - Q where Q is the total industry output, that is the sum of the output of all firms in the market. There are two firms (indexed by i = 1,2) who both have a cost of producing the good given by c(qi) = 10 * qi The two firms are competing in the Cournot manner, that is they choose their quantities simultaneously in order to maximize profits.There are two firms, Firm 1 and Firm 2. The two firms’ products are viewed as identical by most consumers. The relevant cost functions are C(Q1) = 10 + 4Q1 and C(Q2) = 12 + 16Q2, and the market demand curve for product is given by P = 50 – 4Q. Instructions: Use no decimals. Use the average cost to calculate monopoly profits. Do not round values if used to complete other calculations. Complete the following table. Q1 Q2 P Profits F1 Profits F2 Duopoly competition CollusionYou are the manager of Taurus Technologies (T), and your sole competitor is Spyder Technologies (S). The two firms’ products are viewed as identical by most consumers. The relevant cost functions are C(QT) = 120 + 8QT and C(QS) = 120 + 10QS, and the market demand curve for this unique product is given by P = 160 – 2.5Q. Instructions: Use no decimals. Use the average cost to calculate monopoly profits. Do not round if values are used to complete other calculations. Complete the following table. Q1 Q2 P Profits T Profits S Duopoly competition 854 Collusion