EBK INTERMEDIATE MICROECONOMICS AND ITS
12th Edition
ISBN: 9781305176386
Author: Snyder
Publisher: YUZU
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Question
Chapter 12, Problem 12.4P
a)
To determine
To Draw: the graph for the best-response functions and also find the Nash equilibrium assuming
b)
To determine
the graph to indicate that how an increase in
c)
To determine
analogue to the stackelberg equilibrium might be with firm A choosing price first and then firm B and also conclude the better choice to the first mover or the second mover when firms choose prices.
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Consider a model of imperfect competition in which Firms 1, 2, and 3 choose their
prices P₁, P2, and p3 simultaneously, with the demand for their products given by
X₁1 (P₁, P2, P3) = 3 - 2p₁ +2p2,
X₂(P1₁, P2, P3) = 6 - 4p2 + 2p₁ +
X3 (P1, P2, P3) = 3 - 2p3 + 2p2-
2p3,
The firms have constant marginal costs c₁ = 2, C₂ = 5, and c3 = 2.
(a) Express each firm's profits as a function of the three price choices.
(b) Write each firm's first-order condition for profit maximization.
(c) Compute the equilibrium prices and each firm's equilibrium profits.
I
Suppose that Raleigh and Dawes are the only sellers of bicycles in the UK. The inverse market demand function for bicycles is P(Y)=200-2Y. Both firms have the same total cost function: TC(Y)=12Y and the same marginal cost: MC(Y)=12. Suppose this market is a Stackelberg oligopoly, and Raleigh is the first mover. Write down a formula for the reaction function of Dawes. Calculate the equilibrium quantity that each firm produces and the equilibrium price in the market.
Give typing answer with explanation and conclusion
1. if the total cost function for this market is TC = 500 + 10Q2 , calculate the total and marginal costs for each of the quantities in the table. what is the demand function for this market?
2. What are the profit-maximizing quantity, price, and profit for this market?
3. If there are two firms Atlas and Bowden in this market with the same earlier total cost function and they engage in Cournot competition, what is each firm's equilibrium quantity, price, and profit? [NB: round quantities to nearest integer to find equilibrium quantity, price, and profit]
Chapter 12 Solutions
EBK INTERMEDIATE MICROECONOMICS AND ITS
Ch. 12.2 - Prob. 1TTACh. 12.2 - Prob. 2TTACh. 12.2 - Prob. 1MQCh. 12.2 - Prob. 2MQCh. 12.2 - Prob. 1.1TTACh. 12.2 - Prob. 2.1TTACh. 12.2 - Prob. 1.1MQCh. 12.3 - Prob. 1MQCh. 12.3 - Prob. 2MQCh. 12.3 - Prob. 1TTA
Ch. 12.3 - Prob. 2TTACh. 12.3 - Prob. 1.1MQCh. 12.3 - Prob. 2.1MQCh. 12.3 - Prob. 1.1TTACh. 12.3 - Prob. 2.1TTACh. 12.4 - Prob. 1TTACh. 12.4 - Prob. 2TTACh. 12.5 - Prob. 1MQCh. 12.5 - Prob. 2MQCh. 12.5 - Prob. 1TTACh. 12.5 - Prob. 2TTACh. 12.6 - Prob. 1MQCh. 12.6 - Prob. 2MQCh. 12 - Prob. 1RQCh. 12 - Prob. 2RQCh. 12 - Prob. 3RQCh. 12 - Prob. 4RQCh. 12 - Prob. 5RQCh. 12 - Prob. 6RQCh. 12 - Prob. 7RQCh. 12 - Prob. 8RQCh. 12 - Prob. 9RQCh. 12 - Prob. 10RQCh. 12 - Prob. 12.1PCh. 12 - Prob. 12.2PCh. 12 - Prob. 12.3PCh. 12 - Prob. 12.4PCh. 12 - Prob. 12.5PCh. 12 - Prob. 12.6PCh. 12 - Prob. 12.7PCh. 12 - Prob. 12.8PCh. 12 - Prob. 12.9PCh. 12 - Prob. 12.10P
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