Question
In: Economics
Consider three firms that face market demand P= 99-Q . The cost functions are C1(q1)=6q1*2for firm...
Consider three firms that face market demand P= 99-Q . The cost functions are C1(q1)=6q1*2for firm 1, C2=2q2*2( C2 = (2q2)square ) for firm 2, andC3(q3)=2q3*2 for firm 3. Firm 1 is the Stackelberg leader and firms 2 and 3 are the followers. What is firm 1's equilibrium output q1?
Solutions
Rahul Sunny answered 2 years agoRelated Solutions
Consider three firms that face market demand P= 99-Q . The cost functions are C1(q1)=6q1*2for firm...
Consider three firms that face market demand P= 99-Q . The cost
functions are C1(q1)=6q1*2for firm 1, C2=2q2*2( C2 = (2q2)square )
for firm 2, andC3(q3)=2q3*2 for firm 3. Firm 1 is the Stackelberg
leader and firms 2 and 3 are the followers. What is firm 1's
equilibrium output q1?
Consider three firms that face market demand P= 99-Q . The cost functions are C1(q1)=6q1*2for firm...
Consider three firms that face market demand P= 99-Q . The cost
functions are C1(q1)=6q1*2for firm 1, C2=2q2*2( C2 = (2q2)square )
for firm 2, andC3(q3)=2q3*2 for firm 3. Firm 1 is the Stackelberg
leader and firms 2 and 3 are the followers. What is firm 1's
equilibrium output q1?
Consider three firms that face market demand P=98-Q The cost functions are c1(q1)= 6q^2 for firm 1,...
Consider three firms that face market demand P=98-Q The cost
functions are c1(q1)= 6q^2 for firm 1, c2(q2)=
2q^2 for firm 2, and c3(q3)= 2q^2 for firm 3. Firm 1 is
the Stackelberg leader and firms 2 and 3 are the followers. What is
firm 1's equilibrium output q1?
Q1.Two firms produce in a market with demand P=100-Q. The marginal cost for firm 1 is...
Q1.Two firms produce in a market with demand P=100-Q. The
marginal cost for firm 1 is constant and equals 10. The marginal
cost of firm 2 is also constant and it equals 25. Firm 1 sets
output first. After observing firm 1's output, firm 2 sets its
output. (Please pay attention. Read the brackets correctly.)
1a. For firm 2, the best response is R₂(q₁)=(A-q₁)/2. The value
for A is?
1b. Solve for the Stackelberg equilibrium. The quantity sold by
firm...
Consider 2 firms facing the demand curve: P=90-5Q, where Q =Q1+Q2 The firms' cost functions are...
Consider 2 firms facing the demand curve: P=90-5Q, where Q
=Q1+Q2
The firms' cost functions are C1(Q1)=15+Q1 and
C2(Q2)=15+30Q2
How much should Firm 1 be willing to pay Firm 2 if collusion is
illegal but a takeover is not? Firm 1 should be willing to pay
__.
Duopoly quantity-setting firms face the market demand: P = 300–Q where Q = Q1 + Q2....
Duopoly quantity-setting firms face the market demand: P = 300–Q
where Q = Q1 + Q2. Each firm has a marginal cost of $30 per unit
and zero fixed costs. (a) What are the quantities chosen by each
firm in the Cournot equilibrium? What is the market price? (b) What
are the quantities chosen by each firm in the Stackelberg
equilibrium, when Firm 1 moves first? What is the market price? How
does this market price compare to the market...
1. Duopoly quantity-setting firms face the market demand: P = 600–(1/2)Q where Q = Q1 +...
1. Duopoly quantity-setting firms face the market demand:
P = 600–(1/2)Q
where Q = Q1 + Q2. Each firm has a marginal cost of $60 per unit
and zero fixed costs.
(a) What are the quantities chosen by each firm in the Cournot
equilibrium? What is the market price?
(b) What are the quantities chosen by each firm in the
Stackelberg equilibrium, when Firm 1 moves first? What is the
market price? How does this market price compare to the...
Two firms face the following demand curve: P = 50 – 5Q, where Q = Q1...
Two firms face the following demand curve: P = 50 – 5Q, where Q
= Q1 + Q2.
The firms cost functions are C1 (Q1) = 20
+ 10Q1 for firm 1 and C2 (Q2)= 10
+ 12Q2 for firm 2.
Suppose both firms have entered the industry. What is the joint
profit maximizing level of
output?
[5Marks]
What is each firms equilibrium output and profit if they behave
non-cooperatively? Use the Cournot
model.
[5Marks]
c. How much should Firm...
Consider an oligopolist market with demand: Q = 18 – P. There are two firms A...
Consider an oligopolist market with demand: Q = 18 – P. There
are two firms A and B. The cost function of each firm is given by
C(q) = 8 + 6q. The firms compete by simultaneously choosing
quantities.
a. Write down firm A’s profit function and derive firm A’s
reaction function.
b. Plot the reaction functions of both firms in a diagram.
c. What is the optimal quantity produced by firm A and firm
B?
d. Now suppose firm...
Consider a market with two firms, facing the demand function: p = 120 – Q. Firms...
Consider a market with two firms, facing the demand function: p
= 120 – Q. Firms are producing their output at constant
MC=AC=20.
If the firms are playing this game repetitively for infinite
number of times, find the discount factor that will enable
cooperation given the firms are playing grim trigger strategy.
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