1.
Consider
two
companies A and
B sharing a
market by producing identical goods (or highly...
1.Considertwo
companiesA and
Bsharing a
market by producing identical goods(or highly substitutable
goods).Company A’s marginal
costisMC=20and company B’s
marginal cost isMC=10.Market demand
isknown to
beP=100-0.001Q.
1. Consider two companies A and B sharing a market by
producing identical goods (or highly substitutable goods). Company
A’s marginal cost is MC=20 and company B’s marginal cost
is MC=10. Market demand is known to be
P=100-0.001Q.
Find profit maximizing level of QA and
QB under oligopoly setting.
Determine the market price.
Determine the revenue of company A and B.
Determine the profit of company A and B.
Find collusive level of profit maximizing output for A and
B...
Consider two companies A and B sharing a market by producing
identical goods (or highly substitutable goods). Company A’s
marginal cost is MC=20 and company B’s marginal cost is MC=10.
Market demand is known to be P=100-0.001Q. (e) Find collusive level
of profit maximizing output for A and B (Under collusion A and B
share the same MC=10 and share the market equally). (f) Using a
simple game theory method, show that the collusive outcome is not
sustainable. Be sure...
Consider two companies A and Bsharing a market by
producing identical goods (or highly substitutable goods). Company
A’s marginal cost is MC=20and company B’s marginal cost is
MC=10. Market demand is known to be
P=100-0.001Q.
Find profit maximizing level of QAand
QBunder oligopoly setting.
Determine the market price.
Determine the revenue of company A and B.
Determine the profit of company A and B.
Find collusive level of profit maximizing output for A and
B(Under collusion A and B share...
Consider a market with two identical firms, Firm A and Firm B.
The market demand is ? = 20−1/2?, where ? = ?a +?b . The cost conditions are
??a = ??b = 16.
a) Assume this market has a Stackelberg leader, Firm A. Solve
for the quantity, price and profit for each firm. Explain your
calculations.
b) How does this compare to the Cournot-Nash equilibrium
quantity, price and profit? Explain your calculations.
c) Present the Stackelberg and Cournot equilibrium...
SCENARIO 3: Consider an industry consisting of two firms
producing an identical product. The inverse market demand equation
is P = 100 − 2Q. The total cost equations for firms 1 and 2 are TC1
= 4Q1 and TC2 = 4Q2, respectively.
Refer to SCENARIO 3. Firm 1 is the Stackelberg leader and firm 2
is the Stackelberg
follower. The profit of the Stackelberg follower is:
a. $288.
b. $432.
c. $486.
d. $576.
e. None of the above.
Consider a firm producing two goods, good A and good B, by using
a fixed amount of labor. The production possibilities set of the firm
is given by Y = {(a,b) ∈ R2 + | a2 +4b2 ≤ 16}. Assume the price of
A and the price of B are equal to $1. Solve the revenue maximizing
level of outputs for the firm.
2. In the oligopoly market, only two companies A and B produce
goods of the same quality. Each company is involved in producing
goods.
The marginal cost and average cost are the same at 30. When
the market demand function is Q=900-10P, answer the following
questions
- Draw the balance with Bertrand, and describe the process in
which Bertrand's balance was drawn.
-Draw the profits of each of the two companies in Bertrand's
balance.
There are two companies, X and Y, that produce two identical
products, A and B. If their labor productivity of the respective
products is as follows, determine the following advantages:
Product A
Product B
Company X
100 units per labor hour
30 units per labor hour
Company Y
40 units per labor hour
60 units per labor hour
Who has the absolute advantage in producing A: ______;
Who has the absolute advantage in producing B: ______;
Who has the comparative...
There are two main company(A, B) in a market. Their products are
identical. MC = $1/1 product.
Qd = -1000P + 15000 (Demand curve)
What is a payoff matrix by finding two company’s profit if two
company make a cartel and split the market equally?
What is a payoff matrix by finding two company’s profit if
company A makes 1000 more product while company B keeps the
previous agreement?
What is the Nash equilibrium in the two situation? The cartel...
In a two goods (x and y) world, two districts (A and B) are
identical, except the prices of good x (Px) and good y (Py) are
higher and lower in district A, respectively. Suppose two identical
individuals (i.e. same preferences and income) live in the two
districts separately and their optimal choices are interior
solutions. Evaluate the following statement: ‘The MRS at the
optimal choices of two individuals are the same’. True, false, or
uncertain? Explain your answer intuitively...