EBK INTERMEDIATE MICROECONOMICS AND ITS
12th Edition
ISBN: 9781305176386
Author: Snyder
Publisher: YUZU
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Question
Chapter 12, Problem 12.5P
a)
To determine
To compute: The Nash-
b)
To determine
To ascertain: the profits for each firm.
c)
To determine
To ascertain: The aspects of the Bertrand Paradox show up in this given example.
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The market demand function is
Each firm has a marginal cost of m = $0.28. Firm 1, the leader, acts before Firm 2, the follower. Solve for the Stackelberg-Nash equilibrium quantities, prices, and profits.
The Stackelberg-Nash equilibrium quantities are
The Stackelberg-Nash equilibrium price is
Profits for the firms are
and
92
p = $
π2
$
=
Q=7,000 1,000p.
91
and
units
units. (Enter your responses as whole numbers.)
(Enter your response rounded to two decimal places.)
π₁ = $
(Enter your responses rounded to two decimal places.)
1. The market (inverse) demand function for a homogeneous good is P(Q) = 10 - Q. There are
two firms: firm 1 has a constant marginal cost of 2 for producing each unit of the good, and
firm 2 has a constant marginal cost of 1. The two firms compete by setting their quantities of
production, and the price of the good is determined by the market demand function given the
total quantity.
a. Calculate the Nash equilibrium in this game and the corresponding market price
when firms simultaneously choose quantities.
b. Now suppose firml moves earlier than firm 2 and firm 2 observes firm 1 quantity
choice before choosing its quantity find optimal choices of firm 1 and firm 2.
Suppose we have two identical firms A and B, selling identical
products. They are the only firms in the market and compete by
choosing quantities at the same time. The Market demand curve
is given by P=477-Q. The only cost is a constant marginal cost of
$16. Suppose Firm A produces a quantity of 66 and Firm B
produces a quantity of 49.
If Firm A decides to increase its quantity by 1 unit while Firm B
continues to produce the same 49 units, what is the Marginal
Revenue for Firm A from this extra unit? Enter a number only, no
$ sign. Don't forget to include the negative sign if revenue
decreases.
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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