In a Cournot market with two firms, the inverse market demand curve is P=50-2Q, where Q=q1+q2(Firm 1’s output is ; Firm 2’s output is ). Both firms have a constant marginal cost of 14. If Firm 2 produces 12 units of output, how much should Firm 1 produce? Group of answer choices 3 6 0 12
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In a Cournot market with two firms, the inverse market demand curve is P=50-2Q, where Q=q1+q2(Firm 1’s output is ; Firm 2’s output is ). Both firms have a constant marginal cost of 14. If Firm 2 produces 12 units of output, how much should Firm 1 produce?
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- Suppose we have two identical firms A and B, selling identical products. They are the only firms in the market and compete by choosing quantities at the same time. The Market demand curve is given by P=477-Q. The only cost is a constant marginal cost of $16. Suppose Firm A produces a quantity of 66 and Firm B produces a quantity of 49. If Firm A decides to increase its quantity by 1 unit while Firm B continues to produce the same 49 units, what is the Marginal Revenue for Firm A from this extra unit? Enter a number only, no $ sign. Don't forget to include the negative sign if revenue decreases.Suppose we have two identical fırms A and B, selling identical products. They are the only firms in the market and compete by choosing quantities at the same time. The Market demand curve is given by P=390-Q. The only cost is a constant marginal cost of $14. Suppose Firm A produces a quantity of 57 and Firm B produces a quantity of 44. If Firm A decides to increase its quantity by 1 unit while Firm B continues to produce the same 44 units, what is the Marginal Revenue for Firm A from this extra unit? Enter a number only, no $ sign. Don't forget to include the negative sign if revenue decreases. 231There are only two driveway paving companies in a small town, Asphalt, Inc. and Blacktop Bros. The inverse demand curve for paving services is ?= 2040 ―20? where quantity is measured in pave jobs per month and price is measured in dollars per job. Assume Asphalt, Inc. has a marginal cost of $100 per driveway and Blacktop Bros. has a marginal cost of $150. Answer the following questions: Determine each firm’s reaction curve and graph it. How many paving jobs will each firm produce in Cournot equilibrium? What will the market price of a pave job be? How much profit does each firm earn?
- 10Two firms produce differentiated products. The demand for each firm’s product is as follows: Demand for Firm 1: q1 = 20 – 2p1 + p2 Demand for Firm 2: q2 = 20 – 2p2 + p1 Both firms have the same cost function: c(q) = 5q. Firms compete by simultaneously and independently choosing their prices and then supplying enough to meet the demand they receive. Please compute the Nash equilibrium prices for these firms.Suppose we have two identical fırms A and B, selling identical products. They are the only firms in the market and compete by choosing quantities at the same time. The Market demand curve is given by P=287-Q. The only cost is a constant marginal cost of $13. If Firm A produces a quantity of 60 and Firm B produces a quantity of 33, what is market price? Enter a number only, no $ sign. 194Economics Bidding for Bookstore Licenses. Paige initially has the only license to operate a bookstore in Bookville. She charges a price of $13 per book, has an average cost of $3 per book, and sells 1,501 books per year. When Paige's license expires, the city decides to auction two bookstore licenses to the highest bidders. Suppose the relevant variables (price, average cost, and output per firm) take on only integer valueslong dash—no fraction or decimals. a. Suppose Paige is optimistic and imagines the best possible outcome with a two-firm market. What is the maximum amount she is willing to pay for one of the two licenses? $ nothing (Hint: How will the relevant variables change? What is the smallest possible change in their values?) b. Suppose Paige is pessimistic and imagines the worst possible outcome with a two-firm market. What is the maximum amount she is willing to pay for one of the two licenses? $ nothing (Enter your response as an integer.)
- 11 8. Suppose an industry produces an undifferentiated product for which market demand is given by X = A- P. There are many potential producers for this product, each of whom has a production function of the form: Fixed costs of F must be paid for being in business, and the marginal cost of a unit of production is a constant k . We imagine that firms decide whether to enter the industry under the supposition that, after all the firms that are going to enter do so, competition will be according to the Cournot model. That is, if N firms are in the market each has Cournot conjectures. An equilibrium is achieved with N firms in the industry if each firm, having its Cournot conjectures, does no worse than break even, whereas if another firm entered and made this an N + 1 firm Cournot oligopoly, all the firms would lose money. What is the equilibrium in this case? What (if anything) would be…Mavi and Diesel both make basic blue jeans. The demand curves for the two firms are given by Qm=135,000−3000Pm+1200Pd Qd=154,000−4000Pd+1000Pw suppose it is a price equilibrium for Mavi to set a price of $30 per pair of jeans and Diesel to set a price of $25. What is marginal cost for Mavi What is marginal cost for Diesel. The market for widgets consists of two firms that produce identical products. Competition in the market is such that each of the firms independently produces a quantity of output, and these quantities are then sold in the market at a price that is determined by the total amount produced by the two firms. Firm 2 is known to have a cost advantage over firm 1. A recent study found that the (inverse) market demand curve faced by the two firms is P = 280 – 2(Q1 + Q2), and costs are C1(Q1) = 3Q1 and C2(Q2) = 2Q2. a. Determine the marginal revenue for each firm. b. Determine the reaction function for each firm.
- wo 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 error_outlineHomework solutions you need when you need them. Subscribe now.arrow_forward Question 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 =…3. The (market) inverse demand function for a good is as follows: 12- 2q if q = [0,6], if q> 6. Pp(q) = { 12 There are two firms: N = {1,2}. Each firm's cost function is such that producing a units of the good incurs cost 2r. We consider the Cournot competition of the two firms. That is, they simultaneously choose their quantities. The firms are profit-maximizers. (1) Find a Nash equilibrium. (2) What is the size of the deadweight loss incurred by the Duopoly, compared to the competitive equilibrium allocation?3. Suppose there are only two firms in an industry selling an identical product where the quantity produced must be set well in advance of the good being sold in the market (and thus the quantity cannot be changed rapidly). The market demand for this good is given by the following equation: Q = 1,000 - 4P. Firm A's marginal cost of production is as follows: MC Α = 30 + 1.5Q₁. Firm B's marginal cost of production is as follows: MCB 100+ 2.5QB. Assume that each firm knows the other's cost of production. = a. If the two firm's decide their output simultaneously, how much output will each firm produce? What price will be charged in the market for the good? b. If the firm A's decides its output first and then B decides its output second, how much output will each firm produce? What price will be charged in the market for the good? Does A have an advantage by setting output first? Explain.