Please help with these two: 1. Consider a Duopoly model, in which two firms decide a quantity simultaneously. If they collude (setting the total quantity together), then each firm can earn (higher, or lower) profit than in the Cournot equilibrium. 2. Consider a collusion with two firms. The joint profit is maximized by setting quantity and price together. Each firm sells the agreed amount. However, believing that the other firm sells the agreed amount, there is always a temptation for the firm sell (more, or less) than the agreed amount.

If Gulfstream and Bombardier, both producers of upscale jet airplanes, were to collude rather than compete, consumers could expect: Group of answer choices A) higher prices and higher quantities offered for sale. B) higher prices and lower quantities offered for sale. C) one firm to emerge as the price leader in the oligopoly. D) lower prices and lower quantities offered for sale. E) each firm to cheat on the cartel agreement.

2. Deviating from the collusive outcome Mays and McCovey are beer-brewing companies that operate in a duopoly (two-firm oligopoly). The daily marginal cost (MC) of producing a can of beer is constant and equals $0.80 per can. Assume that neither firm had any startup costs, so marginal cost equals average total cost (ATC) for each firm. Suppose that Mays and McCovey form a cartel, and the firms divide the output evenly. (Note: This is only for convenience; nothing in this model requires that the two companies must equally share the output.) Place the black point (plus symbol) on the following graph to indicate the profit-maximizing price and combined quantity of output if Mays and McCovey choose to work together. 2.00 1.80 Monopoly Outcome 1.60 Demand 1.40 1.20 1.00 MC = ATC 0.80 0.60 0.40 0.20 MR 40 80 120 160 200 240 280 320 360 400 QUANTITY (Cans of beer) PRICE (Dollars per can)

Consider the following Cournot Duopoly diagram... Firm 1 Reaction Function r₁ A 6 C 0 E no Isoprofit curves for firm 1 Firm 2 Reaction Function 1₂ At what point is the Cournot equilibrium achieved? Q₁

Consider a COURNOT duopoly. Market demand is P(Q)=14-Q, and each firm faces a marginal cost of $1 per unit, no FC. If firms cooperate and divide the profit between each other, how much is each firm's profit?

Question 1 Suppose the romaine lettuce industry is a Cournot duopoly with the following two firms: Amalgamated Romaine (a) and Best Romaine (b). The (inverse) market demand schedule is: p = 262 -0.5Q Amalgamated Romaine has the following cost structure: MCATC₁ = $6 Best Romaine has a different cost structure: MC₁ = ATC₁ = $8 Find the following in Cournot-Nash equilibrium. a. Output of Amalgamated Romaine = b. Output of Best Romaine = c. Cournot duopoly equilibrium price = $ units units 3 pts

Mays and McCovey are beer-brewing companies that operate in a duopoly (two-firm oligopoly). The daily marginal cost (MC) of producing a can of beer is constant and equals $0.80 per can. Assume that neither firm had any startup costs, so marginal cost equals average total cost (ATC) for each firm. Suppose that Mays and McCovey form a cartel, and the firms divide the output evenly. (Note: This is only for convenience; nothing in this model requires that the two companies must equally share the output.) Place the black point (plus symbol) on the following graph to indicate the profit-maximizing price and combined quantity of output if Mays and McCovey choose to work together. 2.00 1.80 Monopoly Outcome 1.60 Demand 1.40 1.20 1.00 MC = ATC 0.80 P 0.60 0.40 0.20 MR 70 140 210 280 350 420 490 560 630 700 QUANTITY (Cans of beer) PRICE (Dollars per can) ---

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.…

Duopoly: 1. Consider a duopoly game with 2 firms. The market inverse demand curve is given by P(Q) = 120-Q, where Q = 9₁ +9₂ and q; is the quantity produced by firm i. The firm's long run total costs are given by C₁(9₁)=2q₁ and C₂(92)=92, respectively. a. Determine the Nash Equilibrium for Cournot competition, in which firms compete based on quantity. What is each firm's best response as a function of the other firm's output? Graph these best response functions in on the same graph. Compute the associated payoffs for each firm. b. Determine the Nash Equilibrium for Bertrand competition, in which firms compete based on price and stand ready to meet market demand at that price. What is each firm's best response as a function of the other firm's price? Graph these best response functions in on the same graph. Compute the associated payoffs for each firm. Game Th

Suppose Canon raised the price of its printers, but Hewlett-Packard (the largest seller) refused to follow. Two years later, Canon cut its price, and Hewlett-Packard retaliated with an even deeper price cut, which Canon was forced to match. For the next five years, Hewlett- Packard raised its prices five times, and each time, Canon followed suit within 24 hours. The model underlying the pricing behavior of these firms is the: Cartel model O Perfect competition model Nonprice competition model Price leadership model