In: Economics

Consider a Cournot duopoly of two identical cigarette producing firms, Warlboro and Cramel. They produce tobacco...

Two identical firms compete in a Bertrand duopoly. The firms produce identical products at the same...
Two identical firms compete in a Bertrand duopoly. The firms produce identical products at the same constant marginal cost of MC = $10. There are 2000 identical consumers, each with the same reservation price of$30 for a single unit of the product (and $0 for any additional units). Under all of the standard assumptions made for the Bertrand model, the equilibrium prices would be Group of answer choices$10 for both firms $30 for both firms$50 for both...
Consider a Cournot duopoly where P = 400 - 4Q1 - 4Q2. The two firms are...
Consider a Cournot duopoly where P = 400 - 4Q1 - 4Q2. The two firms are identical. Each firm treats the other firm’s production quantity as a constant. The marginal cost of production is 16 for every unit. What is the best production level for Firm 1?
a.) Two identical firms compete as a Cournot duopoly. The market demand is P=100-2Q, where Q...
a.) Two identical firms compete as a Cournot duopoly. The market demand is P=100-2Q, where Q stands for the combined output of the two firms, Q=q1 +q2. The marginal cost for each firm is 4. Derive the best-response functions for these firms expressing what q1 and q2 should be. b.) Continuing from the previous question, identify the price and quantity that will prevail in the Cournot duopoly market c.) Now suppose two identical firms compete as a Bertrand duopoly. The...
Consider two identical firms in a Cournot competition. The market demand is P = a –...
Consider two identical firms in a Cournot competition. The market demand is P = a – bQ. TC1 = cq1 = TC2 = cq2 . Find the profit function of firm 1. Maximize the profit function to find the reaction function of firm 1. Solve for the Cournot-Nash Equilibrium. Carefully discuss how the slope of the demand curve affects outputs and price.
Cournot: Consider a Cournot duopoly in which firms A and B simulta- neously choose quantity. Both...
Cournot: Consider a Cournot duopoly in which firms A and B simulta- neously choose quantity. Both firms have zero costs. Market demand is given by: P =360−3Q, where Q = qA + qB . (a) Derive each firm’s best-response function and plot them on the same graph. (b) Find the unique Nash Equilibrium. Label the Nash equilibrium in your graph from part (a). (c) Calculate total welfare in the Nash Equilibrium. (d) Calculate deadweight loss (if any) in the Nash...
Consider the following variant of theBertrand Model of Duopoly. Suppose there are two firms producing the...
Consider the following variant of theBertrand Model of Duopoly. Suppose there are two firms producing the same good and they simultaneously set prices for their product. If firm i sets a price piand firm j sets a price pj, the total quantity demanded for firm i’s product is given by:qi= 10 –pi+ ½ pjEach firm produces exactly the qidemanded by the market. Bothfirms have the same marginal cost of production: c=4. For example, if a firm produces 5 units it...
13-) In a Cournot duopoly, firms 1 and 2, produce Y1 and Y2, respectively. They have...
13-) In a Cournot duopoly, firms 1 and 2, produce Y1 and Y2, respectively. They have identical total cost function C(Yi) = 2 Yi, i = 1, 2. The market demand function is Y = 20 - p, where Y = Y1 + Y2. The market price p in a Cournot equilibrium is: Select one: a. 8 b. 20 c. 12 d. 4 14-) Which of the following is not a decision faced by a firm in a perfectly competitive...
Two firms are participating in a Cournot duopoly. The demand function in the market is given...
Two firms are participating in a Cournot duopoly. The demand function in the market is given by Q=430−2P. Each firm’s total cost is given by C(q)=5q+q2. (1) Write down the inverse demand function and the maximization problem for Firm 1 given that Firm 2 is expected to produce q2^e. (2) Write down the reaction function q1(q2^e) for Firm 1. (3) Find the market price, quantities supplied, and firms’ profits in the Cournot equilibrium of this game.
Consider the equilibrium of the Cournot model of duopoly. a. Can the firms benefit from collusion...
Consider the equilibrium of the Cournot model of duopoly. a. Can the firms benefit from collusion in this instance if they happen to initially be at the intersection of the two reaction curves and the collusion is enforced? Explain your answer. b. Show that each firm has an incentive to break any collusive agreement. c. Has the experience of the international oil cartel, OPEC, supported your answers?