1)What is called Best Response or Reaction Function in the context of the Cournot Oligopoly model?...

1)What is called Best Response or Reaction Function in the context of the Cournot Oligopoly model?

Given the market demand curve faced by the Stackelberg duopolies

P = 120 – 0.5QD MCA = $20

QD = QA + QB MCB = $34

Where the leader firm is Firm A and the follower is Firm B

Hints:

TRB = P * QB

MRB = ¶TRB / ¶QB

a)Anticipating Firm B’s reaction to its output level, what is the output level Firm A will be deciding to produce?

b)What is the total industry output, QD?

Expert Solution

Rahul Sunny answered 1 year ago

In the Cournot model of oligopoly, when the interaction is not repeated, collusion is difficult to...

In the Cournot model of oligopoly, when the interaction is not repeated, collusion is difficult to sustain because Group of answer choices the collusive agreement must be approved by a regulator before the firms make their decisions. the collusive agreement is not a Nash Equilibrium. there are whistleblowers everywhere who keep the firms in check. the collusive agreement generates lower profits than if the firms compete with each other.

2) Two firms, a and b, in a Cournot oligopoly face the inverse demand function p...

2) Two firms, a and b, in a Cournot oligopoly face the inverse demand function p = 500 – 2Q. Their cost function is c (qi) = 20 + 4qi2 for i = a, b. Calculate the profit maximizing price output combination. (3)

3) Two firms, a and b, in a Cournot oligopoly face the inverse demand function p...

3) Two firms, a and b, in a Cournot oligopoly face the inverse demand function p = 25 – Q. Their cost function is c (qi) = 0.5*qi for i = a, b. Calculate the profit maximizing price output combination. (3)

1.Using a linear demand function and constant marginal cost function as illustration, explain the Cournot model...

1.Using a linear demand function and constant marginal cost function as illustration, explain the Cournot model with product differentiation. Derive the sufficient condition that all firms have no incentive to cheat. 2.In the context of a static duopoly model explain why the joint profit maximizing solution is unstable. Discuss some factors that may engender collusion. 3.Using a quadratic net birth function, and linear total cost and catch functions as illustration, derive the supply function of fishery. Why this supply function...

When is the Stackelberg variant of oligopoly competition more appropriate than the standard Cournot model? Group...

When is the Stackelberg variant of oligopoly competition more appropriate than the standard Cournot model? Group of answer choices when the firms are trying to collude. when one firm makes its output decision before the others. whenever there are more than two firms. when all firms enter the market simultaneously.

What is a Firm's best response function in an oligopsonistic labor market?

In a Cournot Oligopoly market with the demand function p=220−0.5⋅Q there are 2 firms producing homogeneous...

In a Cournot Oligopoly market with the demand function p=220−0.5⋅Q there are 2 firms producing homogeneous product. The total cost functions of the first and second firm are TC1=15+4⋅q1TC1=15+4⋅q1 and TC2=20+5⋅q2TC2=20+5⋅q2, respectively. Firms choose their output levels simultaneously. Calculate the output level for firm 1 in equilibrium. Round you answer to the first decimal place.

) Discuss Oligopoly. Consider some of the following questions in your response: What is an oligopoly?...

) Discuss Oligopoly. Consider some of the following questions in your response: What is an oligopoly? Why do oligopolies form? Do oligopolists enjoy market advantages not available to other firms? In your response please identify 2 or 3 industries characterized by oligopoly ... like the soft drink industry pictured above!

Using a linear demand function and constant marginal cost function as illustration, explain the Cournot model...

Using a linear demand function and constant marginal cost function as illustration, explain the Cournot model with product differentiation. Derive the sufficient condition that all firms have no incentive to cheat.

What are the key characteristics of an oligopoly model?

Question