The inverse demand for an oligopoly market with an identical product is given by -2Q+337. Let...

The inverse demand for an oligopoly market with an identical product is given by -2Q+337. Let q₁ and q₂ denote the output for firms 1 and 2 respectively.

Firm 1 bought new equipment so its marginal cost is 24. However, firm 1 incurred a fixed cost of 53 in the process. Firm 2's marginal cost is 56.

Firm 1s new objective is to maximize what function? (Answer is -2Qq+225q-53, I understand)

The outcome of Nash equilibrium of the competitive market will have q1=? and q2=? (Answer is q1=115/3 and q2=83/2, I understand)

The equilibrium price p=? (Answer=139, I understand)

The profits of the firm 1 and firm 2 are? (Answer is firm1 profits=31997/6 and profits for firm 2= 23323/6, I understand)

Question below:

The consumer surplus will be? (Answer CS=9801, how did they get this?)

The total producer surplus will be? (Answer is PS=9273, how did they get this?)

Expert Solution

Rahul Sunny answered 1 year ago

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