Consider a Bertrand duopoly where market demand is P(Q)=107-5Q. Each firm faces a marginal cost $18 and no fixed cost. what is one market price that can occur in a Nash equilibrium?
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Consider a Bertrand duopoly where market demand is P(Q)=107-5Q. Each firm faces a marginal cost $18 and no fixed cost. what is one market price that can occur in a Nash equilibrium?
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- Consider a Bertrand duopoly. Market demand is P(Q)=41-3Q, and each firm faces a marginal cost of $4 per unit. How much is the sum of firms' total revenue in the Nash equilibrium?Consider a Bertrand duopoly where market demand is P(Q)=5-9Q. Each firm faces a marginal cost $2 and no fixed cost. How much is the dead weight loss in a Nash equilibrium?Consider a duopoly where firms compete in prices and firms do not have any capacity constraints. Market demand is P(Q)=45-4Q, and each firm faces a marginal cost of $9 per unit. How much is each firm's total variable cost if firms equally divide the market at Nash equilibrium?
- Consider a market that is a Bertrand oligopoly with 5 firms in the market. Each of these firms produce an identical product and each have the same cost function of C(Q) = 80Q. The inverse market demand for this product is P = 2480 – 2Q. What is the equilibrium market price?Consider a market for crude oil production. There are two firms in the market. The marginal cost of firm 1 is 20, while that of firm 2 is 20. The marginal cost is assumed to be constant. The inverse demand for crude oil is P(Q)=200-Q, where Q is the total production in the market. These two firms are engaging in Cournot competition. Find the production quantity of firm 1 in Nash equilibrium. If necessary, round off two decimal places and answer up to one decimal place.Consider two firms that produce the same good and competesetting quantities. The firms face a linear demand curve given by P(Q) =1 − Q, where the Q is the total quantity offered by the firms. The costfunction for each of the firms is c(qi) = cqi, where 0 < c < 1 and qiis the quantity offered by the firm i = 1, 2. Find the Nash equilibriumoutput choices of the firms, as well as the total output and the price, andcalculate the output and the welfare loss compared to the competitiveoutcome. How would the answer change if the firms compete settingprices? What can we conclude about the relationship between competitionand the number of firms?
- Consider a market that is a Bertrand oligopoly with 5 firms in the market. Each of these firms produce an identical product and each have the same cost function of C(Q) = 80Q. The inverse market demand for this product is P = 2480 – 2Q. How much does EACH firm produce at the equilibrium price?Consider two firms that produce the same good and compete setting quantities. The firms face a linear demand curve given by P (Q) = 1 − Q, where the Q is the total quantity offered by the firms. The cost function for each of the firms is c(qi) = cqi, where 0 < c < 1 and qi is the quantity offered by the firm i = 1,2. Find the Nash equilibrium output choices of the firms, as well as the total output and the price, and calculate the output and the welfare loss compared to the competitive outcome. How would the answer change if the firms compete setting prices? What can we conclude about the relationship between competition and the number of firms?The demand for a product is Q = a - P/2. If there are 4 firms in an industry and marginal cost is MC = 20, then the price in Nash equilibrium is P = 56. What is a?
- Two firms, A and B, sell the same good X in a market with total demand Q = 100 – P. The two firms compete on quantities and decides how much to produce simultaneously. Firm A cost function is C(qA) = 40qA. Firm B cost function is C(qB) = 60qB. 1. Find the best reply functions of both firms and represent them in a graph. 2. Find the quantity produced by each firm in a Nash equilibrium. 3. Find the firms and consumers surplus. 4. Compare the surplus of firms found above with the surplus arising when both firm cooperate to sustain a monopoly outcome. 5. Assume now that A and B compete as in a Stackelberg model. A chooses first and B chooses after observing the choice of A. Find equilibrium quantities produced by each firm and the market equilibrium price.The welfare of the society is maximized when the consumers have more freedom to choose, and the consumer surplus is maximized because the price of the good is close to its cost of production. This condition is true if the market is oligopolistic. True FalseThree firms compete in the style of Cournot. The inverse demand is P(Q) = a - Q. Scenario 1: All three firms have the same constant marginal cost MC = c. Scenario 2: Firm 1 has MC = 0.5c, Firm 2 has MC = c, and Firm 3 has MC = 1.5c. Assume that a > 3c. Which of the following is correct? (Price means the price in Nash equilibrium.) Price in scenario 1 > Price in scenario 2 Price in scenario 2 > Price in scenario 1 Price in scenario 1 = Price in scenario 2 Any of the first three options is possible depending on the value of a Any of the first three options is possible depending on the value of a and c.
