Question 53: Given that a duopoly's inverse market demand curve is P = 120-Q which is shared by two firms namely Firm A and Firm B and (Q = QA +QB.) The two firms have the same cost functions where Marginal cost is 20. a. Under the Cournot equilibrium, calculate the output of each firm QA and QB and total output Q b. Under a Collusive equilibrium, calculate the output of each firm and the total output Q c. Under the Stackelberg equilibrium where Firm A has first mover advantage, calculate the output of each firm d. Calculate the market price at each equilibrium output under Cournot, collusive and Stackelberg models

Question 53: Given that a duopoly's inverse market demand curve is P = 120-Q which is shared by two firms namely Firm A and Firm B and (Q = QA +QB.) The two firms have the same cost functions where Marginal cost is 20. a. Under the Cournot equilibrium, calculate the output of each firm QA and QB and total output Q b. Under a Collusive equilibrium, calculate the output of each firm and the total output Q c. Under the Stackelberg equilibrium where Firm A has first mover advantage, calculate the output of each firm d. Calculate the market price at each equilibrium output under Cournot, collusive and Stackelberg models

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter15: Imperfect Competition

Section: Chapter Questions

Problem 15.4P

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