Assume that there are two firms in the market described by the inverse demand function P(q1,q2)%3D186 - (2/2)(q1+q2). Firm 1 has marginal costs of 51 and decides on first. Firm 2 has marginal costs of 62 and moves second. Both firms decide on quanties once. How much does firm 1 produce in equilibrium?
Q: Three firms sell identical products in a market with inverse demand given by P(Q) = 540 - 4Q, where…
A: The sequential move game in game theory is a game where one player acts at a time and another player…
Q: 9: Suppose there are two restaurants on an island, Ace's (A) and Betty's (B). They both have to…
A: Since we only answer up to 2 sub-parts for complex questions, we’ll answer the first 2. Please…
Q: The daily demand for pizzas is where P is the price of a pizza. The daily costs for a pizza company…
A: Demand function; Qd = 780 - 25P25P = 780 - QP = 31.2 - Q/25 Fixed cost, FC = $50Variable cost, VC =…
Q: each situation, soive for tne tackelberg equiln 7a) Suppose Sarah's constant MC is $5 but Joe's is…
A:
Q: Each firm will charge a price of $1. (Enter a numeric response rounded to two decimal places.) Each…
A: where and are the prices charged by each firm respectivelyand and are the resulting demands.
Q: Consider now a Bertrand competition environment with one good and two firms, Firm 1 and Firm 2. The…
A: The answer given below Explanation:Let's dissect the issue and work through it one step at a…
Q: The daily demand of two firms Firm 1 and Firm 2 producing two products is given by : D1 = 5 - 22P1…
A: Answer a). profit of firm A: n1 = P₁*D₁ -0.5D₁ => 1 = (P₁ -0.5)*(50/9 - 200/9 P₁ + 100/9
Q: (6) For each situation, solve for the Cournot-Nash equilibrium (Capacity Constraints) 6a) Suppose…
A:
Q: Consider a market dominated by two firms with identical cost functions C(q) = c*q for some constant…
A: In Bertrand competition firms compete in prices rather than quantities . Cost function : C(q) = c*q…
Q: Scenario: In the town of Isoville there are two grocery stores: Alfonso’s Ammenities and Bernice’s…
A: A best response function, often used in game theory, is a mathematical concept that describes the…
Q: indeed support the collusive equilibrium. Now suppose that Firm 2’s marginal cost is $4, but Firm…
A: The correct answer is given in the second step.
Q: Q.3 Two firms produce homogeneous products. The inverse demand function is given by: p(x₁, x2) =…
A:
Q: Let market demand be given by Q(P) = 100-P. Firm 1's cost function is given by C(q)-10q₁. Firm 2's…
A: Nash equilibrium refers to a situation in which each player in a game makes the best decision…
Q: Two firms produce complementary products. Suppose the demand for their products is given by q1(p) =…
A: An oligopoly is a market with few large firms, high barriers to entry, and significant…
Q: Two firms compete in a homogeneous product market where the inverse demand function is P = 20 − 5Q…
A: Since, you have posted a question with multiple sub-parts, we'll solve first three sub-parts for…
Q: You work for a marketing firm that has just landed a contract with Run-of-the-Mills to help them…
A: The concept of CPE of demand shows the responsiveness of changes in the demand for one good caused…
Q: You are the manager of Taurus Technologies, and your sole competitor is Spyder Technologies. The two…
A: Given; Cost function; C(Qi)=2Qi Demand function; P=650-3Q where; Q=Q1+Q2
Q: (6) For each situation, solve for the Cournot-Nash equilibrium (Capacity Constraints) 6a) Suppose…
A:
Q: You are the manager of Taurus Technologies, and your sole competitor is Spyder Technologies. The two…
A: * ANSWER :-
Q: You are the manager of Taurus Technologies, and your sole competitor is Spider Technologies. The two…
A: * SOLUTION :- Given that , The cost function is C(Qi) = 2Qi, The product is given by P =290 -…
Q: In the Salop model the price for a firm in a symmetric equilibrium is p (n) = c + where C is the…
A: Given information Inverse demand function for firm in symmetric equilibrium=P(n)=C+T/n Free entry…
Q: Two firms compete in a homogeneous product market where the inverse demand function is P = 20 -5Q…
A: Current price = $15, output will be:P=20-5Q15=20-5Q5Q=20-155Q=5Q=55Q=1 millions By dividing the…
Q: In Problem 9, suppose that firm 2 acts as a price leader and can commit in advance to setting its…
A: In a duopoly market firms makes strategic moves. Under which they select their strategy at which…
Q: Two firms, Firm 1 and Firm 2, compete by simultaneously choosing prices. Both firms sell an…
A: A market form in which two firms dominate and control the majority of the market share for a…
Q: Suppose that two identical firms produce widgets and that they are the only firms in the market. The…
A: Ans in step 2
Q: You are the manager of Taurus Technologies, and your sole competitor is Spyder Technologies. The two…
A: a) Equilibrium Quantityy:[340−2Q=4Q][6Q=340][Q=3406]Q= 56.67b) Substitute (Q) into the Demands…
Q: they share the market equally. Costs are given by (g) = 16g. Because of government regulation, firms…
A:
Q: Two firms, Firm 1 and Firm 2, compete by simultaneously choosing prices. Both firms sell an…
A: A market form in which two firms dominate and control the majority of the market share for a…
Q: Consider two firms that compete according to the Cournot model. Inverse demand is P (Q) = 16 − Q.…
A: Cournot Duopoly model: This is an oligopoly model where 2 firms compete in the market. Here both…
Q: (10) Two firms compete by choosing price. Their demand functions are Q1 = 20 – P, + P, and Q2 = 20 +…
A: Demand functions are: Q1=20-P1+P2Q2=20-P1+P2
Q: I understand the other parts. Can you please answer part d and e below? Each of two firms, firms 1…
A: (d)It is given that,Inverse demand function: P = 120 – Q where Q = q1 + q2.Cost function:Firm 1:…
Q: 3. Consider two firms that simultaneously choose quantities q1, 42. The price per unit is specified…
A: Given information demand function P=12-q1-q2 MC=C
Q: Firms 1 and 2 produce a homogeneous product in the market, with market demand Q=200-p. Each firm i…
A: a) Cournot EquilibriumIn Cournot equilibrium, each business picks its production to maximize profit,…
Q: Suppose the bank reserve to bank deposit ratio decreases in the United States. Everything else held…
A: Meaning of Money Supply: The term money supply refers to the situation under which the overall…
Q: You are the manager of Taurus Technologies, and your sole competitor is Spyder Technologies. The two…
A: This is an example of duopoly, a type of oligopoly in which a market is dominated by two competing…
Q: Consider two firms, referred to as firms 1 and 2, who compete in a market by choosing quantities…
A: Demand function : P (Q) = 10 - 2Q Marginal Cost of each firm = 4 Number of firms in the market is 2…
Q: Yummy Yummy Popcorn, Inc. sells bags of flavored popcorn in a popular mall. As shop owner and…
A: Answer: Given, Demand function: Q=1,200-800P+2AA=$500Current price=$1.50 per bagMarginal cost…
Q: In an industry where firms use workers with different personality traits to produce a product.…
A: Cost can be defined as a concept that shows the amount of expenditure and any other sacrifice such…
Q: "o firms products are w unt cost functions are C For this unique product pur rival simultaneousl on…
A: A) Here, in the case that the firm don't take the venture/investment the benefit would be 54080 for…
Q: Jim and TJ are Cournot duopolists. They each make an identical product. They will simultaneously…
A: Introduction Tim and Tj are Cournot duopolist. They each make identical product and have identical…
Q: Consider the following inverse demand function, p(Q) = 5-7Q, Q = 91 + 92, where q, denotes firm i's…
A: The inverse demand function is given as The equation for quantity is given as The total cost for…
Q: Consider the following two-person (4,B), two-product (.X, Y) exchange system. Initial Existence of A…
A: Two person , two good exchange system : Initial Endowment A : ( X , Y) = (30 , 0 ) Initial Endowment…
Q: Three firms share a market. The demand function is P(q1, 42, 93) = 10 – q1 - 2 – 3, where q; is the…
A: Profit function of each firm will be Profiti = TRi - TCi where TRi =(10-q1-q2-q3)qi
Step by step
Solved in 2 steps
- You are the manager of Taurus Technologies, and your sole competitor is Spyder Technologies. The two firms’ products are viewed as identical by most consumers. The relevant cost functions are C(Qi) = 2Qi, and the inverse market demand curve for this unique product is given by P = 410 −2 Q. Currently, you and your rival simultaneously (but independently) make production decisions, and the price you fetch for the product depends on the total amount produced by each firm. However, by making an unrecoverable fixed investment of $1,000, Taurus Technologies can bring its product to market before Spyder finalizes production plans. (Assume Taurus Technologies is the leader in this scenario.)What are your profits if you do not make the investment? $What are your profits if you do make the investment?Instructions: Do not include the investment of $1,000 as part of your profit calculation. $.Economics Consumers are uniformly distributed on an interval of length 1. They pay transportation costs of $1 per kilometer. Each wants to buy one unit of a homogeneous good. Two firms producing this homogeneous good are located at the two end points of the interval. They simultaneously choose prices for their product. Firm 1 has the option of paying a bus company a lump sum $L so that customers can reach firm 1 with transportation costs $0.5 per kilometer (the cost of reaching firm 2 remains $1 per km). (a) How much is firm 1 willing to pay the bus company for this privilege? (b) Provide an economic explanation for your answer.Two firms sell substitutable products; the market price is: P = 90-Q, where Q Q₁ + Q2 is the total market quantity, which consists of Q1₁ (the quantity produced by Firm 1) and Q2 (the quantity produced by Firm 2). The firms choose their quantities simultaneously. Firm 1's costs are C₁ 6Q₁ + Q². Firm 2's costs are C₂ = Q². = O Which is the payoff function for Firm 2? O π₂ = 90Q₂ - 2 Which is the best response function for Firm 1? O π₂ = 90Q₂ - Q²². πT2 π₂ = 45 - Q² Q₁ Q₂₁ 2 O π₂ = 45 - 1²/20₁². Q₁ Q₁ 3 = 16. ²/Q²-Q₁2. = 32- 2- 1/1/202₂. 3 Q₁ = 45. Q1 = 40 + ²/Q₂₁ 2.2. = 10- -
- Question 3:Suppose the inverse demand for a good is given by P = 50 – 4Q, where Q is the totalquantity supplied by all firms in the market. Suppose each firm in the market has a constantmarginal cost of 18.Q3 a) Assume the market consists of two firms that set their quantities simultaneously.Calculate the duopoly levels of production and the equilibrium price. Q3 b) Now assume firm 1 chooses its production level before firm 2 does. What will be theequilibrium quantities, price and profits in this case?Q3 c) Now instead suppose that the two firms compete over prices rather than quantities.What will be the equilibrium price and profits of firms 1 and 2 in this case? Finally, if firm 1manages to lower its marginal cost to 14, what will be the new equilibrium price, quantitiesand profits?If you borrow PHP 80,000 from a lender for one year and 2 months at 3% discount interest rate, how much proceeds will you receive?There are two identical firms in an industry, 1 and 2, each with cost function , i = 1,2. The industry demand curve is P = 100 − 5X where industry output, X, is the sum of the two firms’ outputs (X1 + X2). (a) If each firm makes its output decisions on the assumption that the other will not react to its choices (the Cournot assumption), what is the equilibrium output for each firm? What is the equilibrium price? (b) Suppose that each firm takes it in turn to choose its level of output, on the assumption that the other’s output level is fixed. Would the process of adjustment be stable? (c) Suppose that firm 1 introduces a cost-saving innovation, so that its cost curve becomes C1 = 8X1. Firm 2’s cost curve and the industry demand curve are unchanged. What happens to the equilibrium quantity produced by each firm and to market price?
- Suppose the inverse market demand for manufactures is P(Q) = A – Q, where P and Q denote price and total goods produced and the parameter A denotes the size of the domestic market. Suppose any firm has a cost function, c(q) = cq, where A > c. Suppose there are two firm in the market which produce q1 and q2, where Q = q1 + q 2 a. Solve for the Cournot equilibrium levels of output (Q*), price (P*) and markups. b. What is the impact of an increase in market size, A, on Q*, P* and markups when there are two firms? Provide some intuition for these predictions. c.…Suppose two firms, A and B, have a cost function of ?(??) = 30??, for ? = ?, ?. The inverse demand for the market is given by ? = 120 − ?, where Q represents the total quantity in the market, ? = ?? + ??. 1. Solve for the firms’ outputs in a Nash Equilibrium of the Cournot Model. 2. Let Firm A be the first mover, and Firm B be the second mover. Solve for the firms’ outputs in a SPNE of the Stackelberg Model.Consider a Bertrand (price choice) model where firms have identical costs. The equilibrium price is the same whether there are two or three firms in the market. (a) True. (b) False.
- Figure 14-2 Xenophone (X Decleion Offer Cable or DSL a service Cable OSL Gigom (0) Decision 图 Offer Cable or DSL service Gigsom (G) Decon Ofer Cable or D Went service Cable DS Cable DSL X 80 million G: 19 milion X: 54 milion G: $45 milion x 55 million G: 16.5 milion X: 50 milion $7 The government of a developing country plans to award two firms, Gigacom and Xenophone, the exclusive rights to share the market for high speed internet service. Gigacom and Xenophone can both provide the service either via television cable lines or via direct subscriber line (DSL). Suppose the government is considering a proposal to delay one firm's entry into the market on the grounds that it wants to prevent "harmful" competition. Figure 14-2 shows the decision tree for this game. Refer to Figure 14-2. Now suppose that the government delays Xenophone's entry and Gigacom moves first, what is the likely outcome in the market? Both offer internet service via cable line: Xenophone earns a profit of $6 million…Consider two firms producing homogeneous goods. Firm 1 and firm 2 simultaneously set outputs q and q2. The inverse demand is P=20-3(q₁+9₂) and both firms have marginal costs of 2. In a Nash equilibrium, the firms produce a. (qq) = (2,2) b. (992) = (1.5,3) Ⓒc. Each of the other suggestions might occur in a Nash equilibrium d. (9₁.92 )=(3,1.5)You are the manager of Taurus Technologies, and your sole competitor is Spyder Technologies. The two firms' products are viewed as identical by most consumers. The relevant cost functions are C(Q) = 4Q;, and the inverse market demand curve for this unique product is given by P= 100 -2 Q. Currently, you and your rival simultaneously (but independently) make production decisions, and the price you fetch for the product depends on the total amount produced by each firm. However, by making an unrecoverable fixed investment of $200, Taurus Technologies can bring its product to market before Spyder finalizes production plans. (Assume Taurus Technologies is the leader in this scenario.) What are your profits if you do not make the investment? $ What are your profits if you do make the investment? Instructions: Do not include the investment of $200 as part of your profit calculation. $ Should you invest the $200? O Yes - the cost of establishing the first-mover advantage exceeds the benefits.…