Question
In: Economics
Two firms are participating in a Stackelberg duopoly. The demand function in the market is given...
Two firms are participating in a Stackelberg duopoly. The demand function in the market is given by Q = 2000 − 2P . Firm 1’s total cost is given by C1(q1) = (q1)^2 and Firm 2’s total cost is given by C2(q2) = 100q2. Firm 1 is the leader and Firm 2 is the follower.
(1) Write down the inverse demand function and the maximization problem for Firm 1 given that Firm 2 is expected to produce R2(q1).
(2) Compute the reaction function R2(q1) for Firm 2.
(3) Find the market price and the quantities supplied by the firms
in the Stackelberg
equilibrium of this game.
Solutions
Rahul Sunny answered 1 year agoRelated Solutions
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.
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
Question 4 Two firms compete as a Stackelberg duopoly. The demand they face is P =...
Question 4 Two firms compete as a Stackelberg duopoly. The
demand they face is P = 40 − Q. The cost function for each firm is
C(Q) = 4Q. What are the profits of the two firms? I believe the
answer is πL = $162; πF = $81. however I need clear steps to
understand how to understand the process.
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
Refer to a duopoly market in which the inverse demand function is given by P =...
Refer to a duopoly market in which the inverse demand
function is given by P = 96 − Q. Firm 1's cost function is
c(q1) = 6q1 + 300, and firm 2's cost function
is c(q2) = 6q2 + 600 (such that each firm has
MC = 6).
Q1: The outputs of the two firms in Cournot-Nash
equilibrium will be:
1) q1 = 45 and q2 = 0.
2) q1 = 30 and q2 = 30.
3) q1 = 45...
Refer to a duopoly market in which the inverse demand function is given by P =...
Refer to a duopoly market in which the inverse demand
function is given by P = 96 − Q. Firm 1's cost function is
c(q1) = 6q1 + 0.5q12,
and firm 2's cost function is c(q2) = 6q2 +
0.5q22 (such that each firm has MC = 6 +
q).
Q1: The Cournot best-response function for firm 1 will
be:
1) q1 = 22.5 − q2/4
2) q1 = 30 − q2/3
3) q1 = 45 − q2/2
4) q1...
In a duopoly market with two identical firms, the market demand curve is: P=50-2Q And the...
In a duopoly market with two identical firms, the market demand
curve is: P=50-2Q And the marginal cost and average cost of each
firm is constant: AC=MC=2 a. Solve for firm 1’s reaction curve and
graph b. Solve for firm 2’s reaction curve and graph c. Solve for
each firm’s Q and P in a cournot equilibrium and show on your graph
i. What is the profit for each firm?
You are given the market demand function. Q = 2200 - 1000p and that each duopoly...
You are given the market demand function.
Q = 2200 - 1000p
and that each duopoly firm's marginal cost is $0.07 per unit,
which implies the cost function:
C (qi) = 0.07qi,
assuming no fixed for i = 1,2.
The Cournot Equilibrium quantities are q1 = _______
and q2=______ (enter your response as whole
numbers).
The Cournot Equilibrium price is $_______ (round to the
nearest penny).
Calculate the Cournot profits: firm 1 $______ and firm 2 $______
(round both responses...
Demand in a market dominated by two firms (a Cournot duopoly) is determined according to: P...
Demand in a market
dominated by two firms (a Cournot duopoly) is determined according
to: P = 300 – 4(Q1 + Q2), where P is the
market price, Q1 is the quantity demanded by Firm 1, and
Q2 is the quantity demanded by Firm 2. The marginal cost
and average cost for each firm is constant; AC=MC = $77.
The cournot-duopoly
equilibrium profit for each firm is _____.
Demand in a market dominated by two firms (a Cournot duopoly) is determined according to: P...
Demand in a market dominated by two firms (a Cournot duopoly) is
determined according to: P = 300 – 4(Q1 +
Q2), where P is the market price, Q1 is the
quantity demanded by Firm 1, and Q2 is the quantity
demanded by Firm 2. The marginal cost and average cost for each
firm is constant; AC=MC = $68.
The cournot-duopoly equilibrium profit for each firm is
_____.
Hint: Write your answer to two decimal places.
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