Two firms compete in a single market (duopoly) with demand given by QD=60-P. The two firms have identical cost functions, C(q)=2q. Suppose firm 1 chooses its output first, following by firm 2 (Stackelberg model). In this case, firm 1 produces ✓ units and firm 2 produces ✓. Firm 1 earns ✓ units. The price in the market is ✓and firm 2 earns $ $ Does firm 1 have a first-mover advantage here?

There are two firms in a market and they compete in a Nash-Cournot manner. Firm 1 faces the demand function p1(g1,92) = 200 - 91 - 92, and has a total cost function TC1 = (91)2. Firm 2 faces the demand function p2(91,92) = 160 - 92 - 91, and has a total %3D cost function TC2 = (92)2. Answer each of the following questions. a. Find the Nash-Cournot equilibrim output and price v for firm 1. b. Find the Nash-Cournot equilibrim output v and price v for firm 2.

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.…

Two firms produce a homogeneous good and compete in price. Prices can only take integer values. The demand curve is Q = 6 p, where p denotes the lower of the two prices. The lower - priced firm meets all the market demand. If the two firms post the same price p, each one gets half the market demand at that price, i. e., each gets (6p)/2. Production cost is zero.a) Show that the best response to your rival posting a price of 6 is to post the monopoly price of 3. What is the best response against a rival's price of 4? of 5?

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 €30. What price should Firm 2 charge at the Cournot equilibrium

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.)

Consider a Bertrand oligopoly where two firms (Firms 1 and 2) sell goods that are imperfectsubstitutes and compete by choosing prices simultaneously. Their market demands areq!= 1,200 − 3/2p!+ 3/2p", q"= 800 − 2p"+ 1/2p!For simplicity, assume the marginal cost is zero for both firms (MC!= MC"= 0). Find the bestresponse curve of each firm. Which of the following alternatives is correct?(a) Firm 1’s best response curve is p!= 400 + 0.5p"(b) Firm 2’s best response curve is p"= 400 + 0.5p!(c) Firm 1’s best response curve is q!= 45 − 0.5q"(d) Firm 2’s best response curve is q"= 200 + 0.8p!  Then, find the optimal price and quantity of each firm.Hint: Start by finding the Nash equilibrium, that is, the combination of mutual best responses.Which of the following alternatives is correct?(a) For firm 1, p!= $1,600/3 and q!= 800/3(b) For firm 1, p!= $800 and q!= 1,600/3(c) For firm 2, p"= $800 3⁄ and q"= 1,600/3(d) For firm 2, p"= $1,600 and q"= 800  key: !=1 "=2

Consider the following oligopolistic market. In the first stage, Firm 1 chooses quantity q1₁. Firms 2 and 3 observe Firm 1's choice, and then proceed to simultaneously choose 92 and 93, respectively. Market demand is given by p(Q) = 100 – · Q, and Q = 9₁ +92 +93. Firm 1's costs are c₁ (9₁) = 591, firm 2's costs are c₂ (92) = 492 and firm 3's costs are C3 (93) = 493. C2 Starting from the end of the game, you can express Firm 2's best response function in terms of 9₁ and 93, and you can similarly express Firm 3's best response function in terms of 9₁ and 92. Using these, answer the following questions. If rounding is needed, write your answers to 3 decimal places. a) If Firm 1 chooses q₁ = 3, what quantity will Firm 2 choose? b) If Firm 1 chooses 9₁ = 100, what quantity will Firm 2 choose? c) In the subgame perfect Nash equilibrium of this game, firm 1 produces what quantity? d) In the subgame perfect Nash equilibrium of this game, firm 2 and firm 3 each produce what quantity?

Two firms A and B produce a product jointly. The total value to the two firms from the joint venture is given by V = √iA + √iB where iA and iB are the firms’ respective investment levels. After the investment levels have been chosen, the firms divide V equally. a) Find the Nash equilibrium investment levels, and the payoffs for each firm. b) Suppose that A and B merge. Find the optimal investment levels and the payoffs for the merged firm. Do the firms benefit from the merger? Why?

Suppose that Flashfry and Warmbreeze are the only two firms in a hypothetical market that produce and sell air fryers. The following payoff matrix gives profit scenarios for each company (in millions of dollars), depending on whether it chooses to set a high or low price for fryers. Flashfry Pricing High Low For example, the lower-left cell shows that if Flashfry prices low and Warmbreeze prices high, Flashfry will earn a profit of $15 million, and Warmbreeze will earn a profit of $2 million. Assume this is a simultaneous game and that Flashfry and Warmbreeze are both profit-maximizing firms. Warmbreeze Pricing High Low 9,9 2,15 15, 2 8,8 If Flashfry prices high, Warmbreeze will make more profit if it chooses a chooses a price. If Warmbreeze prices high, Flashfry will make more profit if it chooses a chooses a price. Considering all of the information given, pricing low True O False price, and if Flashfry prices low, Warmbreeze will make more profit if it price, and if Warmbreeze…