Consider a market with four firms. Firms A and B have a marginal cost of $7. Firm C has a marginal cost of $11. Firm D has a marginal cost of $5. What occurs if the firms compete in the Bertrand model? Group of answer choices None of the other answers are correct. Firm D will capture the entire market with a price of $6.99. All four firms will each have one quarter of the market with a price of $11. Firms A and B will each have half the market with a price of $7.00. Firm D will capture the entire market with a price of $5.00.

Economics: Industrial Economics Question: In a market that operates under quantity competition there are 2 firms (Cournot duopoly). The inverse demand function is P = A - B Q. The cost structure of firm 1 is given by C1(q1) = F1 + c1 q1 and that of firm 2 is given by C2(q2) = F2 + c2 q2. Prior to competing, the two firms can engage in research at levels (x1, x2) respectively in order to lower their marginal costs. As a result, marginal costs are c1 = c - x1 - β2x2 and c2= C - x2 - β1 X1. where β1 = β2 > ½. Finally, the research costs are F1 = a1 (x1)^2 /2 and F2 = a2 (x2)^2 /2, where a1 > 0 and a2> 0.   1. The Nash Equilibrium research levels are Choices: A. Higher than the cooperative research levels for both firms. B. Higher than cooperative research levels for firm 1 but lower for... C. Lower than the cooperative research levels for both firms. D. Higher than cooperative research levels for firm 2 but lower for...   2. An increase in the value of a2 would Choices: A.…

In the Stackelberg model, the firm that sets output first has an advantage. Explain why using your own words.

2.   Four firms (A, B, C, and D) play a pricing game (i.e. Bertrand).  Each firm (i) may choose any price Pi from 0 to ¥, with the goal of maximizing its own profit. Firms A and B have MC = 10, while firms C and D have MC = 20.  The firms serve a market with the demand curve Q = 100 – P.  All firms produce exactly the same product, so consumers purchase only from the firm with the lowest price.  If multiple firms have the same low price, consumers divide their quantities evenly among the low-priced firms. Assume the firms choose price simultaneously.   a. There are many equilibria in this simultaneous-move pricing game. Provide one equilibrium combination of prices, and argue that no firm has a unilateral incentive to deviate from these prices.   Now assume firm A chooses price first. Firm B observes this choice and then chooses its own price second. Firm C chooses price third, and firm D chooses price last. b. Again, there are many equilibria in this sequential-move pricing game.…

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?

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The last four questions, not the first four.

Consider two Stackelberg firms, Firm Alpha and Firm Omega, each with marginal costs of 50 and each facing the market inverse demand curve: P = 500 – Q. Firm Alpha moves first, Firm Omega moves second. How many MORE units does Firm Alpha produce than Firm Omega due to first mover advantage?

In the Bertrand model, suppose that each firm has a marginal cost of £10 and that firm 1 sets a price of £9.99, which of the following a best-response for firm 2? Click all the correct answers. £10.01 £9.98 £10.00 £11.01 £9.99

The market demand function is Q=10,000-1,000p.   Each firm has a marginal cost of m=$0.28. Firm 1, the leader, acts before Firm 2, the follower. Solve for the Stackelberg-Nash equilibrium quantities, prices, and profits. Compare your solution to the Cournot-Nash equilibrium.   The Stackelberg-Nash equilibrium quantities are:   q1=___________ units   and q2=____________units   The Stackelberg-Nash equilibrium price is:   p=$_____________   Profits for the firms are   profit1=$_______________   and profit2=$_______________   The Cournot-Nash equilibrium quantities are:   q1=______________units   and q2=______________units   The Cournot-Nash equilibrium price is:   p=$______________   Profits for the firms are   profit1=$_____________   and profit2=$_______________