Pearson eText Microeconomics -- Instant Access (Pearson+)
9th Edition
ISBN: 9780136879572
Author: Robert Pindyck, Daniel Rubinfeld
Publisher: PEARSON+
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Question
Chapter 12, Problem 8E
(a)
To determine
The cournot-Nash equilibrium of the market.
(b)
To determine
The
(c)
To determine
The willingness to invest by firm 2 in order to decrease the marginal cost to $25.
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Students have asked these similar questions
Suppose the airline industry consisted of only two firms: American and Texas
Air Corp. Let the two firms have identical cost functions, C(q) = 40q. Assume
that the demand curve for the industry is given by P = 100-Q and that each
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Calculate the Cournot-Nash equilibrium for each firm, assuming that each
chooses the output level that maximizes its profits when taking its rival's
output as given. What are the profits of each firm? (Round all quantities and
dollar amounts to two decimal places.)
When competing, each firm will produce
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Suppose the airline industry consisted of only two firms: American and Texas Air Corp. Let the two firms have identical cost functions, C(q) = 50q.
Assume that the demand curve for the industry is given by P = 190 - Q and that each firm expects the other to behave as a Cournot competitor.
Calculate the Cournot-Nash equilibrium for each firm, assuming that each chooses the output level that maximizes its profits when taking its rival's output
as given. What are the profits of each firm? (Round all quantities and dollar amounts to two decimal places.)
When competing, each firm will produce 46.67 units of output.
In turn, each firm will earn profit of $ 2177.77.
What would be the equilibrium quantity if Texas Air had constant marginal and average costs of $25 and American had constant marginal and average
costs of $50?
If Texas Air had constant marginal and average costs of $25 and American had constant marginal and average costs of $50, American would produce
38.33 units and Texas Air…
Suppose the airline industry consisted of only two firms: American and Texas Air Corp. Let the two firms have identical cost functions, C(q) = 28q. Assume that the demand curve for the industry is
given by P = 100 - Q and that each firm expects the other to behave as a Cournot competitor.
Calculate the Cournot-Nash equilibrium for each firm, assuming that each chooses the output level that maximizes its profits when taking its rival's output as given. What are the profits of each firm?
(Round all quantities and dollar amounts to two decimal places.)
When competing, each firm will produce
units of output.
Chapter 12 Solutions
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