Suppose the inverse demand function for two Cournot duopolists is given by P = 10 – (Q1 + Q2) and their costs are zero. A. What is each firm’s marginal revenue and reaction functions? B. Determine the Cournot equilibrium outputs and equilibrium price. What is the implication of this model?
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Suppose the inverse
A. What is each firm’s marginal revenue and reaction functions?
B. Determine the Cournot equilibrium outputs and
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- Cournot duopolists face a market demand curve given by P = 60 – 1/2Q, where Q is total market demand in units. Each firm can produce output at a constant marginal cost of $15/unit. a) What is the equilibrium price and quantity produced by each firm? b) What if the firm's engaged in Bertrand competition? c) What if one of the firms chose its quantity before its competitor? What is the name for this sort of competition? d) Which of the three forms of competition gives the greatest social surplus?Suppose the inverse demand function for two Cournot duopolists is given by P = 10 −(Q1+ Q2) and their costs are zero. 1. What is each firm’s marginal revenue? 2. What are the reaction functions for the two firms? 3. What are the Cournot equilibrium outputs? 4. What is the equilibrium price?Suppose the inverse demand function for two Cournot dupolists is given by P= 10 – (Q1+Q2) and their cost are zero.a) What is each firm marginal revenue?b) What are the reaction function for the two firmsc) What are the Cournot equilibrium outputd) What is the equilibrium price?
- There are two firms selling differentiated products. Firm A faces the following demand for his product: QA=20-1/2PA+1/4PB Firm B faces the following demand: QB=220-1/2PB+1/4PA PA represents the price set by firm A. PB represents the price set by firm B.Assume that the marginal cost is zero both for firm A and firm B.What are the equilibrium prices of a simultaneous price competition?What would the equilibrium prices be if A is the leader and B is the follower?Suppose a market is served by two firms (a duopoly). The market demand function given by P = 1200 - Q_{1} - Q_{2} where Q_{1} is the output produced by firm and Q_{2} is the output produced by firm 2 . Firm cost of production is given by the function C(Q_{t}) = 120Q_{t} and firm 2's cost of production is given by the function C(Q_{2}) = 120Q_{2} The average cost of firm 1 is given by A*C_{1} = 120 and the average cost of firm 2 is given by A*C_{2} = 120 Marginal profit function for firm 1: Delta pi 1 Delta Q 1 equiv1080-2Q 1 -Q 2; (d*pi_{2})/(Delta*Q_{2}) = 1080 - Q_{1} - 2Q_{2} Marginal profit function for firm 2: What will be the equilibrium profit levels earned by the Stackelberg leader firm and the Stackelberg follower firm?1. marginal costs e, = c, = c, = 20. The inverse demand function is given by P = 100 - Q. where Q = q, + 4: + 93- Consider a market with three firms (i - 1, 2, 3). which have identical a) Identify the reaction functions for each firm and compute the Cournot equilibrium, i.e., the market price and quantity. b) What happens to the market price if all three firms merge compared to part (a)?
- Suppose the iceberg lettuce industry is a Cournot duopoly with two firms: Xtra Leafy (a) and Yummy Farms (y). Xtra Leafy produces q units of output and Yummy Farms produces qy units of output. Aggregate market output is Q = x + y. The (inverse) market demand schedule is: p = 176 - 2Q Both firms have identical cost structures: MC = MC₁ = ATC₂ = ATC₁ = $12 Find Xtra Leafy's Cournot reaction function of the form: 9x = a + bay Where "a" is the reaction function's intercept and "b" is its slope. Note: Please review the formatting instructions above. If any value is negative, be sure to include its negative sign. a. a= b. b = Hint: One of your answers will be negative. Think about why.Suppose two firms compete as Bertrand duopolists for an identical product, where demand is given by Q = 5000 – 50P and both firms have marginal cost of 10 per unit of output. If firm 1 has capacity of 1500 and firm 2 has capacity of 2000, what will the equilibrium price be in this market?There are two soda firms Pepsi and Coke in Bertrand completion . They face demand with the following features: If their price is the lowest Q = 40-.5P, if their price is the same they face demand of half of the market, and if their price is the higher they face demand of zero. Both firms have a marginal cost of 10. Describe each firms reaction functions and the equilibrium price and quantity for each firm. Show your work and clearly mark your answers. Request: Please provide a graph if applicable and don't provide the handwritten answer. Thank you! Your help is much appreciated!
- The inverse demand function in an industry with two firms is given as p = 50 – 2y, where y is the industry demand and p is the price. The firms have different technologies at their production plants with costs given as c(y1) = 10y, and c2[y2) = 14y2, where y = y,+ y2. 1. Assuming the firms are Cournot duopolists, find the equilibrium price, quantity and profit for each firm (if needed, have 2 digits after decimal point). 2. Assuming the firms act as a Stackelberg leader and follower, with firm 1 as the leader, find the equilibrium price, quantity and profit for each firm. 3. If the firms merge into one firm and become a monopoly in the industry, what will be the output of the merged firm? Comment on what would happen to the production plants under one ownership. Find the equilibrium price and profit. 4. Compare and comment on the total industry profits in these three market structures. 5. Assuming the firms are Bertrand duopolists, what is likely to happen? Explain verbally (no need to…Consider two price-setting oligopolies supplying consumers in a certain region of a country. Firm 1 employs many of the people living there and the local government subsidizes its operations. In all other respects, the firms are identical-they have the same constant marginal cost, MC = 4, and produce the same good. The demand function for Firm 1 is q1 = 600 - 50p1 - 20p2 and for Firm 2 is q2 = 600 - 50p2 - 20p1, where p1 is Firm 1's price and p2 is Firm 2's price. a. What are the Nash-Bertrand equilibrium prices and quantities without the subsidy? b. What are they if Firm 1 receives a per-unit subsidy of S = 1? Compare the two equilibria.A) Suppose there are just two firms, 1 and 2, in the oil market and the inverse demand for oil is given by P = 90 – 3Q. The marginal cost for each firm is €18. Calculate the level of output that each firm would produce at the Cournot equilibrium. B) Suppose there are just two firms, 1 and 2, in the oil market and the inverse demand for oil is given by P = 60 – Q. The marginal cost for each firm is €36. What price should Firm 1 charge at the Cournot equilibrium? C) Consider the production function Q = 10KL. Will the MRTS for this production function remain constant along the Q = 200 isoquant? Explain briefly.
