Find the equilibrium locations if there are five firms competing over locations in the Hotelling linear...

Find the equilibrium locations if there are five firms competing over locations in the Hotelling linear city (firms choose locations simultaneously, product space is the unit interval, prices are fixed, and there is uniform distribution of consumers on the unit interval).

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Rahul Sunny answered 2 years ago

In economics, find one real-life example for each of the following: - Firms competing over prices...

In economics, find one real-life example for each of the following: - Firms competing over prices - Firms competing over quantities For each example, describe the industry, strategic interaction, give the names of firms or the industry. Provide information that makes it clear that indeed we have price (or quantity) competition.

Hotelling (1929) developed a model to explain the location and pricing behaviour of firms. His model...

Hotelling (1929) developed a model to explain the location and pricing behaviour of firms. His model can be used to study monopolistic competition by viewing products as being located in product or characteristics space. Explain about Hotelling’s Location Model.

Consider the Hotelling model of the competition between two firms. They must choose to set up...

Consider the Hotelling model of the competition between two firms. They must choose to set up business on a line (=1). Select all that apply. (PLEASE EXPLAIN ANSWERS COMPLETELY) a. If both firms are localized in position 1/2 (i.e., center of the line), neither firm has incentives to deviate and move to a different position. b. If Firm 1 and Firm 2 localize at the same point along the line, they will each sell to 50% of the consumers. c....

Two firms are competing in an oligopolistic industry. Firm 1, the larger of the two firms...

Two firms are competing in an oligopolistic industry. Firm 1, the larger of the two firms are contemplating its capacity strategy, which could be either “aggressive” or “ passive”. Firm 2, the smaller competitor, is also pondering its capacity expansion strategy and a passive strategy. The following table shows the profits associated with each pair of choices: Firm 1 Firm 2 Aggressive Passive Aggressive 25, 9 33, 10 Passive 30, 13 36, 12 a. If both decide their strategies simultaneously,...

(a) What is the Bertrand trap faced by firms competing on setting prices? Explain in a...

(a) What is the Bertrand trap faced by firms competing on setting prices? Explain in a few sentences. Now let us consider the current trend of online sales. E-commerce (selling products in an online marketplace) represents an increasing fraction of economic transactions in many different industries compared to physical brick-and-mortar stores that sold products in the past. (b) Does e-commerce create a Bertrand trap? (Hint: Discuss in terms of how online shopping affects (i) product differentiation and (ii) capacity constraints...

Assume that there are two firms competing with each other (duopoly) and make their output decisions...

Assume that there are two firms competing with each other (duopoly) and make their output decisions at the same time. a) If a collusion occurs between both firms, will it be better or not? Explain your answers. Please proof by using a mathematical equation that explain before and after a collusion. (10 points) b) What advantages the first firm as a first mover will have if this firm sets its output first than the other firm? Explain and support your...

Two firms, A and B, produce complementary products. That is, rather than competing for the same...

Two firms, A and B, produce complementary products. That is, rather than competing for the same customers, demand for each firm’s output increases if the other firm produces more. Specifically, the inverse demand for Firm A’s product is given by pA = 110 − qA + qB. The inverse demand for Firm B’s product is given by pB = 50 − qB + qA. Both firms have marginal cost of 10 and choose quantities to maximize their profit. 5. If...

Consider two identical firms competing as Cournot oligopolists in a market with demand p(Q)=100-0.5Q. Both firms...

Consider two identical firms competing as Cournot oligopolists in a market with demand p(Q)=100-0.5Q. Both firms have total costs,TC=10q where 10 is the marginal cost of production. ( Here Q represents total output in the market whereas q represents firm level output.) (b) Now assume that the firms collude. They again play a one-shot game. What is the output that each firm should produce in order to sustain the collusion? Find the market price, and profits of each firm. Are...

A distributor of personal computers has five locations in the city. The sales in units for...

A distributor of personal computers has five locations in the city. The sales in units for the first quarter of the year were as follows: Location Observed Sales (units) North Side 70 Pleasant Township 75 Southwyck 70 I-90 50 Venice Avenue 35 At the .01 level of significance, what is your decision? Select one: a. Reject the null hypothesis because the computed p-value is less than the level of significance. b. Reject the null hypothesis because the computed p-value is...

Give an example of a competing priority when the good of society is favored over the...

Give an example of a competing priority when the good of society is favored over the good of an individual. Is there a case / example of an instance when the good of the individual is more important than the good of the public? Be specific.

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