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 (q_i) = 20 + 4q_i² for i = a, b. Calculate the profit maximizing price output combination. (3)

Expert Solution

Rahul Sunny answered 8 months ago

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 (qi) = 0.5*qi 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.

In a Cournot Oligopoly market with the demand function p=220−0.5⋅Q there are 2 firms producing homogeneous...

In a Cournot Oligopoly market with the demand function p=220−0.5⋅Q there are 2 firms producing homogeneous product. The total cost functions of the first and second firm are TC1=15+4⋅q1TC1=15+4⋅q1 and TC2=20+5⋅q2TC2=20+5⋅q2, respectively. Firms choose their output levels simultaneously. Calculate the output level for firm 1 in equilibrium. Round you answer to the first decimal place.

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....

Consider an oligopoly with 2 firms. The inverse demand curve is given by P = 100...

Consider an oligopoly with 2 firms. The inverse demand curve is given by P = 100 – Q1 – Q2. Firm 1’s total cost function is TC1 = 30Q1. Firm 2’s total cost function is TC2 = 20Q2. Assume now that the firms compete by choosing their prices simultaneously, so it is a Bertrand Oligopoly model. Assume that firms choose prices in 0.01 in intervals. (i.e. A firm can choose to charge $10.00 or $10.01, but not $10.005). a) Consider...

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