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

Expert Solution

Rahul Sunny answered 2 years ago
Next > < Previous

Related 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...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT