Question

In: Economics

1. The inverse demand curve for sprokets is P = 4,000 - 2(q1 + q2), where...

1.

The inverse demand curve for sprokets is P = 4,000 - 2(q1 + q2), where the market output Q is the sum of each firm's output of sprokets, q1 + q2 and P is the market price. Spokets can be produced at a constant MC = ATC = 1,000 and all sprokets produced are identical.

Suppose there is a duopoly in the production of sprokets and the firms engage in Stackelberg competition. Firm 1 is the Stackelberg leader. What is Firm 1's profit level?

2.

The inverse demand curve for sprokets is P = 4,000 - 2(q1 + q2), where the market output Q is the sum of each firm's output of sprokets, q1 + q2 and P is the market price. Spokets can be produced at a constant MC = ATC = 1,000 and all sprokets produced are identical.

Suppose there is a duopoly in the production of sprokets and the firms engage in Stackelberg competition. Firm 1 is the Stackelberg leader. What is Firm 2's profit level?

3.

The inverse demand curve for sprokets is P = 4,000 - 2(q1 + q2), where the market output Q is the sum of each firm's output of sprokets, q1 + q2 and P is the market price. Spokets can be produced at a constant MC = ATC = 1,000 and all sprokets produced are identical.

Suppose there is a duopoly in the production of sprokets and the firms engage in Cournot competition. What is the market output level, Q = ?

4.

The inverse demand curve for sprokets is P = 4,000 - 2(q1 + q2), where the market output Q is the sum of each firm's output of sprokets, q1 + q2 and P is the market price. Spokets can be produced at a constant MC = ATC = 1,000 and all sprokets produced are identical.

Suppose there is a duopoly in the production of sprokets and the firms engage in Cournot competition. What is the market price, P = ?

5.

The inverse demand curve for sprokets is P = 4,000 - 2Q, where Q is the quantity of sprokets and P is the market price. Spokets can be produced at a constant MC = ATC = 1,000 and all sprokets produced are identical.

Suppose there is a duopoly in the production of sprokets and the firms engage in Bertrand competition. What is the market output level, Q = ?

Solutions

Expert Solution

Rahul Sunny answered 9 months ago
Next > < Previous

Related Solutions

Suppose that the inverse demand function is described by, P = 60-4(q1 +q2), where q1 is...
Suppose that the inverse demand function is described by, P = 60-4(q1 +q2), where q1 is the output of the incumbent firm and q2 is the output of the entrant. Let the labor cost per unit w = 6 and capital cost per unit be r = 6. In addition, each firm has a fixed setup cost of f. (a) Suppose that in stage one the incumbent invests in capacity K1. Find the incum- bentís and entrantís best response functions...
The inverse market demand curve for protocol droids is P = 4,000 – 2Q, where Q...
The inverse market demand curve for protocol droids is P = 4,000 – 2Q, where Q is the quantity of protocol droids and P is the market price. Protocol droids can be produced at a constant marginal cost of $1,000, and all protocol droids are identical. a. Suppose the market for protocol droids is served by two firms that form a cartel and evenly split the market output. What are the market output and price level? b. Suppose the market...
Consider the following inverse demand function, p(Q) = a-bQ, Q = q1 +q2, where a and...
Consider the following inverse demand function, p(Q) = a-bQ, Q = q1 +q2, where a and b are positive parameters and qi denotes firm i's output, i = 1, 2. Assume that the total cost of firm i is cqi2/2, with c > 0. Firms choose quantities simultaneously and non cooperatively (Cournot competition). The Cournot game described above is infinitely repeated. Firms use grim trigger strategies (infinite Nash reversion). Firms discount future profits at a rate r > 0. a)...
Consider a market where the inverse demand function is p =100 – Q, Q = q1+q2....
Consider a market where the inverse demand function is p =100 – Q, Q = q1+q2. Both firms in the market have a constant marginal cost of $10 and no fixed costs. Suppose these two firms are engaged in Cournot competition. Now answer the following questions: a)      Define best response function. Find the best response function for each firm. b)      Find Cournot-Nash equilibrium quantities and price. c)      Compare Cournot solution with monopoly and perfect competitive solutions.
Assume two firms 1 and 2. The inverse market demand function is given by:              P=30-(q1+q2)...
Assume two firms 1 and 2. The inverse market demand function is given by:              P=30-(q1+q2) Each firm produces with marginal costs of MC = 6 Fixed costs are zero. The next questions refer to the Cournot duopoly. Question 1 (1 point) What is Firm 1's total revenue function? Question 1 options: TR1=30q1 -q1 -q22 TR1=30-2q1-q2 TR1=30q1 -q12-q2 None of the above. Question 2 (1 point) What is Firm 1's marginal revenue function? Question 2 options: MR1=30-2q1 -q2 MR1=30-q1-2q2 MR1=30-2q1-2q2...
1. Consider two firms facing the demand curve P=50-5Q where Q = Q1 + Q2. The...
1. Consider two firms facing the demand curve P=50-5Q where Q = Q1 + Q2. The firms’ cost functions are C1(Q1) = 20+10Q1 and C2(Q2) = 10+12Q2. Suppose both firms entered the industry. a) What is the joint profit-maximizing level of output? b) What is total production (Q1+Q2) at the joint profit-maximizing level? c) What is firm 1's output if they behave non-cooperatively (Cournet Model)? d) What is firm 2's output if they behave non-cooperatively (Cournet Model)? e) How much...
Consider 2 firms facing the demand curve: P=90-5Q, where Q =Q1+Q2 The firms' cost functions are...
Consider 2 firms facing the demand curve: P=90-5Q, where Q =Q1+Q2 The firms' cost functions are C1(Q1)=15+Q1 and C2(Q2)=15+30Q2 How much should Firm 1 be willing to pay Firm 2 if collusion is illegal but a takeover is not? Firm 1 should be willing to pay __.
2.         The inverse demand curve for wheat is p = 10 – 0.10Q and the inverse...
2.         The inverse demand curve for wheat is p = 10 – 0.10Q and the inverse supply curve is p = 0.40Q, where p = dollars per bushel and Q is billions of bushels of wheat. Wheat is bought and sold in a perfectly competitive market. a.         Provide a graph of the market for wheat and calculate and show the equilibrium price and quantity (in billions of bushels) in the market. b.         If the government provides a price support of...
The demand function in a duopoly is: P = 100 – 2(Q1 + Q2). If the...
The demand function in a duopoly is: P = 100 – 2(Q1 + Q2). If the first firm decides to sell 10 units while the second firm sells 20 units, which of the following will be true? The second firm will earn twice as much revenue as the first firm. The second firm will sell at a lower price than the first firm. An increase in one firm’s output will not affect the other firm’s revenue. The first firm will...
2. The inverse demand curve of a monopolist is given by:    P = 200 −...
2. The inverse demand curve of a monopolist is given by:    P = 200 − Q and the marginal cost is constant at ​$10, how does charging the monopoly a specific tax of τ=​$12 per unit affect the monopoly optimum and the welfare of​ consumers, the​ monopoly, and society​ (where society's welfare includes the tax​ revenue)? Calculate the following: equilibrium price and quantity before the tax equilibrium price and quantity after the tax the change in consumer surplus the...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT