3) Two firms, a and b, in a Cournot oligopoly face the inverse demand function p...

3) Two firms, a and b, in a Cournot oligopoly face the inverse demand function p = 25 – Q. Their cost function is c (q_i) = 0.5*q_i for i = a, b. Calculate the profit maximizing price output combination. (3)

Expert Solution

Rahul Sunny answered 7 months ago

2) Two firms, a and b, in a Cournot oligopoly face the inverse demand function p...

2) Two firms, a and b, in a Cournot oligopoly face the inverse demand function p = 500 – 2Q. Their cost function is c (qi) = 20 + 4qi2 for i = a, b. Calculate the profit maximizing price output combination. (3)

Two firms operate in a Cournot duopoly and face an inverse demand curve given by P...

Two firms operate in a Cournot duopoly and face an inverse demand curve given by P = 200 - 2Q, where Q=Q1+Q2 If each firm has a cost function given by C(Q) = 20Q, how much output will each firm produce at the Cournot equilibrium? a. Firm 1 produces 45, Firm 2 produces 45. b. Firm 1 produces 30, Firm 2 produces 30 c. Firm 1 produces 45, Firm 2 produces 22.5 d. None of the above.

Consider a Cournot duopoly, the firms face an (inverse) demand function: Pb = 128 - 3...

Consider a Cournot duopoly, the firms face an (inverse) demand function: Pb = 128 - 3 Qb. The marginal cost for firm 1 is given by mc1 = 4 Q. The marginal cost for firm 2 is given by mc2 = 6 Q. (Assume firm 1 has a fixed cost of $ 65 and firm 2 has a fixed cost of $ 87 .) How much profit will firm 2 earn in the duopoly equilibrium ?

Two firms compete as a Stackellberg duopoly. The inverse market demand function they face is P...

Two firms compete as a Stackellberg duopoly. The inverse market demand function they face is P = 65 – 3Q. The cost function for each firm is C(Q) = 11Q. The outputs of the two firms are

Two firms compete as a Stackelberg duopoly. The inverse market demand function they face is P...

Two firms compete as a Stackelberg duopoly. The inverse market demand function they face is P = 65 – 3Q. The cost function for each firm is C(Q) = 11Q. The outputs of the two firms are QL = 9, QF = 4.5 QL = 9, QF = 10.5 QL = 6, QF = 3 QL = 4, QF = 2 Please help/ explain. Thank you

Firms A and B are Cournot duopolists producing a homogeneous good. Inverse market demand is P...

Firms A and B are Cournot duopolists producing a homogeneous good. Inverse market demand is P = 100 − Q , where P is market price and Q is the market quantity demanded. Each firm has marginal and average cost c = 40. (a) The two firms propose to merge. Derive total output, market price, profit and consumer surplus before the merger and after the merger. Explain intuitively any changes you see to these variables when the merger occurs. (b)...

Question #5: Consider a Cournot duopoly, the firms face an (inverse) demand function: Pb = 110...

Question #5: Consider a Cournot duopoly, the firms face an (inverse) demand function: Pb = 110 - 7 Qb. The marginal cost for firm 1 is given by mc1 = 5 Q. The marginal cost for firm 2 is given by mc2 = 7 Q. (Assume firm 1 has a fixed cost of $ 112 and firm 2 has a fixed cost of $ 148 .) How much profit will firm 2 earn in the duopoly equilibrium ?

Assume that two firms are in a Cournot oligopoly market. Market demand is P=120 - Q...

Assume that two firms are in a Cournot oligopoly market. Market demand is P=120 - Q where Q isthe aggregate output in the market and P is the price. Firm 1 has the cost function TC(Q1)=30 + 10Q1 and Firm 2 has the cost function TC(Q2)=15 + 20Q2. a) Write down the Profit function of Firm 1: Profit function of Firm 2: b) Using the profit functions in part (a), obtain the reaction function of Firm 1 to Firm 2....

A) Two firms operate as Cournot competitors. Inverse demand is P = 120 - 2Q. Firm...

A) Two firms operate as Cournot competitors. Inverse demand is P = 120 - 2Q. Firm 1 has total cost function c(q1) = 10q1 and Firm 2 has total cost function c(q2) = 20q2. Solve for the Nash equilibrium in quantities and determine the equilibrium price. B) Now assume the rms are Bertrand competitors, simultaneously choosing prices. Solve for the Nash equilibrium in prices and determine the equilibrium quantities.

1. Two firms compete in Cournot competition. Inverse demand in the market is given by P...

1. Two firms compete in Cournot competition. Inverse demand in the market is given by P = 1500 − 3 Q and each firm has constant marginal cost c = 420. a) Assuming there are no fixed costs, find the Cournot equilibrium market price and quantities produced by each firm. (20 points) b) Now suppose that each firm faces a non-sunk fixed cost of 20,000 if they produce at all. Would the firms still want to produce the amounts you...

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