Question
In: Economics
Consider the market for textbooks, in which only 2 firms compete. The inverse demand for textbook...
Consider the market for textbooks, in which only 2 firms compete. The inverse demand for textbook is given by ?(?)=300−2?P(Q)=300−2Q and the cost of producing textbooks for any firms is given by ?(?)=30?+?2C(q)=30q+q2. Find the Cournot equilibrium of this market.
Solutions
Rahul Sunny answered 2 years agoRelated Solutions
Two firms, a and b, compete in a market to sell homogeneous products with inverse demand...
Two firms, a and b, compete in a market to sell homogeneous
products with inverse demand function P = 400 – 2Q where Q =
Qa + Qb. Firm a has the cost function
Ca = 100 + 15Qa and firm b has the cost
function Cb = 100 + 15Qb. Use this
information to compare the output levels, price and profits in
settings characterized by the following markets:
Cournot
Stackelberg
Bertrand
Collusion
Two firms compete in a market with inverse demand P(Q) = a − Q, where the...
Two firms compete in a market with inverse demand P(Q) = a − Q,
where the aggregate quantity is Q = q1 + q2. The profit of firm i ∈
{1, 2} is πi(q1, q2) = P(Q)qi − cqi , where c is the constant
marginal cost, with a > c > 0. The timing of the game is: (1)
firm 1 chooses its quantity q1 ≥ 0; (2) firm 2 observes q1 and then
chooses its quantity q2 ≥...
1. Consider a market of homogeneous products in which firms compete on price. Demand in this...
1. Consider a market of homogeneous products in which firms
compete on price. Demand in this market is
given by
q(p) = 50 -10p
Consumers buy from the producer with the lowest price. If the
prices of both firms are the same then they
purchase from E. There are both an incumbent firm M and a
potential entrant E which can produce the good
at marginal costs 3 and 2 , respectively. Prior to entry, E must
incur an entry...
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
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...
Two firms compete in a homogeneous product market where the inverse demand function is P =...
Two firms compete in a homogeneous product market where the
inverse demand function is P = 10 -2Q (quantity is measured in
millions). Firm 1 has been in business for one year, while Firm 2
just recently entered the market. Each firm has a legal obligation
to pay one year’s rent of $0.5 million regardless of its production
decision. Firm 1’s marginal cost is $2, and Firm 2’s marginal cost
is $6. The current market price is $8 and was...
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
Two firms compete in a market to sell a homogeneous product with inverse demand function P...
Two firms compete in a market to sell a homogeneous product with
inverse demand function P = 600 − 3Q. Each firm produces at a
constant marginal cost of $300 and has no fixed costs. Use this
information to compare the output levels and profits in settings
characterized by Cournot, Stackelberg, Bertrand, and collusive
behavior.
Two firms compete in a homogeneous product market where the inverse demand function is P =...
Two firms compete in a homogeneous product market where the
inverse demand function is P = 20 -5Q (quantity
is measured in millions). Firm 1 has been in business for one year,
while Firm 2 just recently entered the market. Each firm has a
legal obligation to pay one year’s rent of $1 million regardless of
its production decision. Firm 1’s marginal cost is $2, and Firm 2’s
marginal cost is $10. The current market price is $15 and was...
Two firms compete in a market to sell a homogeneous product with inverse demand function P...
Two firms compete in a market to sell a homogeneous product with
inverse demand function P = 400 – 2Q. Each firm produces
at a constant marginal cost of $50 and has no fixed costs -- both
firms have a cost function C(Q) = 50Q.
If the market is defined as a Bertrand Oligopoly, what is the
market price?
Refer to the information above.
What is the total amount of Q produced in this market?
How much does firm 1...
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