Oligopoly  Consider a market in which the market demand curve is given by P = 18 - Q, Firm 1 has a marginal cost of 3, while Firm 2 has a marginal cost of 6. Find the Cournot equilibrium output. What are the Stackelberg equilibrium output if firm 1 act as the leader?

How are the implications of the kinked demand curve in an oligopoly market best illustrsted and explained

Suppose the airline industry consisted of only two firms: American and Texas Air Corp. Let the two firms have identical cost functions, C(q) - 40g Assume that the demand curve for the industry is given by P= 190 -Q and that each firm expects the other to behave as a Cournot compedtor. Calculate the Coumot-Nash equilibrium for each firm, assuming that each chooses the output level that maximizes as profes when taking its rival's output as given. What are the profits of each firm? (Round all quantities and dollar amounts to two decimal places) When competing, each firm will produce units of output. In tum, each firm will earn profit of $. What would be the equilibrium quantity if Texas Air had constant marginal and average costs of $10 and American had corntant marginal and average costs of S407 It Texas Air had constant marginal and average costs of $10 and American had constant marginal and average costs of S40, American would produceunits and Texas Air Corp. would produce units. In…

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Let ci be the constant marginal and average cost for firm i (so that firms may have different marginal costs). Suppose demand is given by P=1-Q. Calculate the Nash equilibrium quantities assuming there are two firms in a Cournot market. Also compute market output, market price, firm profits, industry prof- its, consumer surplus, and total welfare. Represent the Nash equilibrium on a best-response function diagram. Show how a reduction in firm 1’s cost would change the equilibrium. Draw a representative isoprofit for firm 1.

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QUESTION 13 Consider a market where two firms (1 and 2) produce differentiated goods and compete in prices. The demand for firm 1 is given by D₁(P₁, P2) = 140 - 2p1 + P2 and demand for firm 2's product is D2 (P1, P2) 140 - 2p2 + P1 Both firms have a constant marginal cost of 20. What is the Nash equilibrium price of firm 1? (Only give a full number; if necessary, round to the lower integer; no dollar sign.)

Compare the quantity and price of an oligopoly tothose of a perfectly competitive market.

The Bertrand model of oligopoly reveals that: capacity constraints are not important in determining market performance. perfectly competitive prices can arise in markets with only a few firms. changes in marginal cost do not affect prices. All of the statements associated with this question are true. QUESTION 2 If firms are in Cournot equilibrium: each firm could increase profits by unilaterally increasing output. each firm could increase profits by unilaterally decreasing output. firms could increase profits by jointly increasing output. firms could increase profits by jointly reducing output. OOO

Calculate the Herfindahl index for a duopoly market where each firm has equal market. Calculate the Herfindahl index for a three-firm oligopoly market in which one firm hasa 80% market share and the other firms each have 10% market share. iii. Calculate the Herfindahl index for a 10-firm oligopoly in which each firm has equal     market shares. iv. Which of the above markets is the least competitive?                       Justify your position.