Two firms sell a standardized product in a Cournot oligopoly.  The inverse demand for the market is P = 580 – 3Q where Q = (Q1 + Q2).  The cost functions are C1(Q1) = 4Q1 and C2(Q2) = 4Q2. What is the optimal output level for firm 1?

Two firms who make identical products engage in Cournot competition. The inverse market demand curve is: P(Q) = 60 - 10Q, where Q=9₁ +92. The cost functions are C₁(9₁) 1091 and C₂ (92) : 592 for firms 1 and 2, respectively. Find the Nash equilibrium quantities for each firm. (a) 9₁ = = 1.5, 92 2 (b) q₁ = 92 = 2 (c) q₁ = 92 = 1.5 (d) 9₁ = 1.5, 92 = 3 (e) None of the above options is correct.

Suppose that Raleigh and Dawes are the only sellers of bicycles in the UK. The inverse market demand function for bicycles is ?(?)=200−2?. Both firms have the same total cost function: ??(?)=12? and the same marginal cost: ??(?)=12.Suppose this market is a Stackelberg oligopoly and Raleigh is the first mover.a) Write down a formula for the reaction function of Dawes.b) Calculate the equilibrium quantity that each firm produces and the equilibrium price in the market.c) At the Stackelberg equilibrium, how much profit does each firm make?Suppose now that the two firms decide to act like a single monopolist.a) What will the total quantity of bicycles sold in the market be and what will the equilibrium price be? Represent the profit maximisation problem on a graph and indicate the price and quantity at the equilibrium.b) Calculate the total profit made by the two firms when they act like a monopoly. Compare it with the total profit they were making in the Stackelberg oligopoly.c) For the…

Consider a market that is a Bertrand oligopoly with 5 firms in the market.  Each of these firms produce an identical product and each have the same cost function of C(Q) = 80Q.  The inverse market demand for this product is P = 2480 – 2Q. What is the equilibrium market price?

**Practice** Consider a market with three firms. Each firm has a different cost function. We assume C1(q1) = 7q1, C2(q2) = q2 + 1, and C3(q3) = 3q3.

Two firms sell substitutable products; the market price is: P = 90-Q, where Q Q₁ + Q2 is the total market quantity, which consists of Q1₁ (the quantity produced by Firm 1) and Q2 (the quantity produced by Firm 2). The firms choose their quantities simultaneously. Firm 1's costs are C₁ 6Q₁ + Q². Firm 2's costs are C₂ = Q². = O Which is the payoff function for Firm 2? O π₂ = 90Q₂ - 2 Which is the best response function for Firm 1? O π₂ = 90Q₂ - Q²². πT2 π₂ = 45 - Q² Q₁ Q₂₁ 2 O π₂ = 45 - 1²/20₁². Q₁ Q₁ 3 = 16. ²/Q²-Q₁2. = 32- 2- 1/1/202₂. 3 Q₁ = 45. Q1 = 40 + ²/Q₂₁ 2.2. = 10- -

Consider a standard Cournot oligopoly with n ≥ 2 identical firms, P(x) = a - bX, X ≥ 0, and C(x) = cx2. a. Find the Cournot equilibrium output and profit. b. If m firms wish to merge, what would be their cost function, assuming that they can use all their m production plants but that they otherwise do not have any eciency gains as a result of the merger? c. Given the cost function from part b, when is an m-firm merger profitable to the merged entity? To the non merging firms? d. Give a precise economic intuition explaining your answer relative to the usual (linear cost) case.  

Consider a duopoly where firms compete in prices and firms do not have any capacity constraints. Market demand is P(Q)=45-4Q, and each firm faces a marginal cost of $9 per unit. How much is each firm's total variable cost if firms equally divide the market at Nash equilibrium?

Calculate every step please!!!

Suppose two firms, Firm A and Firm B, are competing by setting quantities (Cournot competition). Firm A has a constant marginal cost of $10 per unit; Firm B has a constant marginal cost of $15 per unit. Assume fixed costs are equal to 0 for both firms. Hint: since fixed costs are zero and the marginal cost is constant, MC = AC. The two firms choose between producing 50 units or 100 units. If the total output is 100 units, the price is $20 per unit; if total output is 150 units, the price is $15 per unit; if total output is 200 units, the price is $10 per unit.  Based on the information provided, fill in the firms’ profits in the payoff matrix below with Firm A choosing the row and Firm B choosing the column.      QB=100   QB=50   QA=100   ,   , QA=50   ,   , The resulting equilibrium is for Firm A to produce ____ (50 or 100)units and Firm B to produce_____ (50 or 100) units.