Question
In: Economics
Two firms compete in a market to sell a homogeneous product with inverse demand function P...
Two firms compete in a market to sell a homogeneous product with inverse demand function P = 600 − 3Q. Each firm produces at a constant marginal cost of $300 and has no fixed costs. Use this information to compare the output levels and profits in settings characterized by Cournot, Stackelberg, Bertrand, and collusive behavior.
Solutions
Rahul Sunny answered 1 year agoRelated Solutions
Two firms compete in a market to sell a homogeneous product with inverse demand function P...
Two firms compete in a market to sell a homogeneous product with
inverse demand function P = 400 – 2Q. Each firm produces
at a constant marginal cost of $50 and has no fixed costs -- both
firms have a cost function C(Q) = 50Q.
If the market is defined as a Bertrand Oligopoly, what is the
market price?
Refer to the information above.
What is the total amount of Q produced in this market?
How much does firm 1...
Two firms compete in a homogeneous product market where the inverse demand function is P =...
Two firms compete in a homogeneous product market where the
inverse demand function is P = 10 -2Q (quantity is measured in
millions). Firm 1 has been in business for one year, while Firm 2
just recently entered the market. Each firm has a legal obligation
to pay one year’s rent of $0.5 million regardless of its production
decision. Firm 1’s marginal cost is $2, and Firm 2’s marginal cost
is $6. The current market price is $8 and was...
Two firms compete in a homogeneous product market where the inverse demand function is P =...
Two firms compete in a homogeneous product market where the
inverse demand function is P = 20 -5Q (quantity
is measured in millions). Firm 1 has been in business for one year,
while Firm 2 just recently entered the market. Each firm has a
legal obligation to pay one year’s rent of $1 million regardless of
its production decision. Firm 1’s marginal cost is $2, and Firm 2’s
marginal cost is $10. The current market price is $15 and was...
Two firms, a and b, compete in a market to sell homogeneous products with inverse demand...
Two firms, a and b, compete in a market to sell homogeneous
products with inverse demand function P = 400 – 2Q where Q =
Qa + Qb. Firm a has the cost function
Ca = 100 + 15Qa and firm b has the cost
function Cb = 100 + 15Qb. Use this
information to compare the output levels, price and profits in
settings characterized by the following markets:
Cournot
Stackelberg
Bertrand
Collusion
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
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
Two firms produce a homogeneous product with an inverse market demand given by P = 100...
Two firms produce a homogeneous product with an inverse market
demand given by P = 100 – 2Q, where Q =
q1+q2. The first firm has a cost function
given by C1=12q1and the second firm has a
cost function given by C2=20q2. The firms
make simultaneous output choices to maximize profit. Determine the
equilibrium values of firm outputs, market output, price, and firm
profits.
With reference to question 1, now assume that decision-making
is sequential with firm 1 choosing its...
Two firms produce a homogeneous product with an inverse market demand given by P = 100...
Two firms produce a homogeneous product with an inverse market
demand given by P = 100 – 2Q, where Q =
q1+q2. The first firm has a cost function
given by C1=12q1and the second firm has a
cost function given by C2=20q2. The firms
make simultaneous output choices to maximize profit. Determine the
equilibrium values of firm outputs, market output, price, and firm
profits.
With reference to question 1, now assume that decision-making
is sequential with firm 1 choosing its...
Two firms compete in a market with inverse demand P(Q) = a − Q, where the...
Two firms compete in a market with inverse demand P(Q) = a − Q,
where the aggregate quantity is Q = q1 + q2. The profit of firm i ∈
{1, 2} is πi(q1, q2) = P(Q)qi − cqi , where c is the constant
marginal cost, with a > c > 0. The timing of the game is: (1)
firm 1 chooses its quantity q1 ≥ 0; (2) firm 2 observes q1 and then
chooses its quantity q2 ≥...
1. Two firms compete in Cournot competition. Inverse demand in the market is given by P...
1. Two firms compete in Cournot competition. Inverse demand in
the market is given by P = 1500 − 3 Q and each firm has constant
marginal cost c = 420.
a) Assuming there are no fixed costs, find the Cournot
equilibrium market price and quantities produced by each firm.
(20 points)
b) Now suppose that each firm faces a non-sunk fixed cost of
20,000 if they produce at all. Would the firms still want to
produce the amounts you...
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