In the Bertrand model, suppose that each firm has a marginal cost of £5 and that firm 1 sets a price of £5, which of the following a best-response for firm 2? Click all the correct answers. £5.00 £4.98 £4.99 £5.20   £5.01

Consider two Cournot firms, Firm A and Firm B. Firm A has a marginal cost of 10 and Firm B has a marginal cost of 5. They face the market inverse demand function: P = 120 – Q How many units will Firm A produce?

A diner has no competition when it comes to it's famous reuben sandwich combo plate, for which the graph shows the diners demand (d), marginal cost (mc), and marginal revenue (mr), curves. The price of $20 is based on the mr = Mc rule for profit maximazation. The rectangular region shown represents the net revenue from sales of the sandwich (total revenue from reuben combo sales minus total variable costs associated with reuben combo sales). Now, suppose the diner decides to raise the price during the lunch hour, which accounts for 60% of reuben combo sales, knowing that it's lunch-hour patrons are the most loyal buyers of the reuben combo and also that they are locked into the lunchtime slot by their work schedules. The diner raises the price just enough not to lose any lunch-hour buyers. Use the area tool to outline the region representing the resulting additional net revenue from the price increases. Part 2: As a result of the revised price structure, the diners net revenue…

The Canadian retail market for roasted whole coffee beans is dominated by two firms: Tim Hortons (T) and Kicking Horse (K). The market demand function is given by P(Q) = 64 – 0.5Q. Assume it is possible to produce partial units of output. • Kicking Horse's marginal cost for each kg of roasted coffee beans is $3. • Tim Horton's marginal cost for each kg of roasted coffee beans is $5 (although they've been around longer than Kicking Horse, they've only recently expanded their product line for consumers to brew their own coffee at home). What is the Cournot market equilibrium (P and Q)?