Question
In: Economics
Suppose that identical duopoly firms have constant marginal costs of $16 per unit. Firm 1 faces...
Suppose that identical duopoly firms have constant marginal costs of $16 per unit.
Firm 1 faces a demand function of: q1=70-2(p1)+1(p2)
where q 1 is Firm 1's output, p1 is Firm 1's price, and p 2 is Firm 2's price.
Similarly, the demand Firm 2 faces is: q2=70-2(p2)+1(p1)
Solve for the Bertrand Equilibrium:
In equilibrium (p1) equals _ and (p2) equals _
Solutions
Rahul Sunny answered 1 year agoRelated Solutions
Another monopolist has constant marginal costs of 10,000 SEK per unit, and faces two separate markets...
Another monopolist has constant marginal costs of 10,000 SEK per
unit, and faces two separate markets that allow price
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Suppose a monopoly has constant marginal costs of $20 per unit. Demand for the monopolist’s product...
Suppose a monopoly has constant marginal costs of $20 per unit.
Demand for the monopolist’s product is Q = 100 - P. Please show the
work to receive the full credit.
i. What are the profit maximizing price and quantity for this
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ii. How many units of the product would the competitive market
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iii. Calculate how much consumer surplus would be lost if this
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(a) [15 marks] Consider two identical firms with no fixed costs and constant marginal cost c...
(a) [15 marks] Consider two identical firms with no fixed costs
and constant marginal
cost c which compete in quantities in each of an infinite number of
periods. The
quantities chosen are observed by both firms before the next round
of play begins.
The inverse demand is given by p = 1 − q1 − q2, where q1 is the
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Firms A and B produce identical goods which have average costs (and marginal costs) given by...
Firms A and B produce identical goods which have average costs
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Suppose the firms behave as Cournot competitors, determine the
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Suppose firm A can successfully commit to a certain output level
before firm B’s decision on how...
Consider the Stackelberg duopoly but with different firms. In particular, the marginal cost of Firm A...
Consider the Stackelberg duopoly but with different firms. In
particular, the marginal cost of Firm A (leader) is cA and the
marginal cost of Firm B (follower) is cB with 0 < cA < cB. We
also need to make the following additional assumptions (for the
equilibrium to make sense): (a) a > cA, (b) a > cB, and (c) a
+ 2cA ? 3cB > 0. What is the sub-game perfect Nash
equilibrium?
Suppose that a perfectly competitive firm faces a market price of $5 per unit, and at...
Suppose that a perfectly competitive firm faces a market price
of $5 per unit, and at this price, the upward-sloping portion of
the firm's marginal cost curve crosses its marginal revenue curve
at an output level of 1,500 units. If the firm produces 1,500
units, its average variable costs equal $5.50 per unit, and its
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Two identical firms compete in output as a duopoly. No firm could possibly know what the...
Two identical firms compete in output as a duopoly. No firm
could possibly know what the other firm will supply (Cournot). The
demand they face is P = 10 – (q1+q2). The
cost function for each firm is C(Q) = 4Q. What is the equilibrium
output, price, and profit of each firm?
6: When we have a homogeneous product duopoly, each firm has constant marginal cost of 10. The...
6: When we have a homogeneous product duopoly, each firm has
constant marginal cost of 10. The market
inverse demand curve is p = 250 –
2Q where Q = q1 +
q2 is the sum of the outputs of firms 1 and 2,
and p is the price of the good. Marginal and
average cost for each firm is 10.
(a) In this market, what are the Cournot and Bertrand
equilibrium quantities and prices? Will the firms collude in a two
period...
6: When we have a homogeneous product duopoly, each firm has constant marginal cost of 10....
6: When we have a homogeneous product duopoly, each firm has
constant marginal cost of 10. The market inverse demand curve is p
= 250 – 2Q where Q = q1 + q2 is the sum of the outputs of firms 1
and 2, and p is the price of the good. Marginal and average cost
for each firm is 10. (a) In this market, what are the Cournot and
Bertrand equilibrium quantities and prices? Will the firms collude
in...
Show that in a Cournot duopoly with constant marginal costs (c1; c2) and linear demand function,...
Show that in a Cournot duopoly with constant marginal costs (c1;
c2) and
linear demand function, equilibrium quantities and profits of
each firm are
decreasing functions of the own marginal cost and increasing
functions on
the marginal cost of the rival firm.
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