Question
In: Economics
1. The Bergen Company and the Gutenberg Company are the only two firms that produce and...
1. The Bergen Company and the Gutenberg Company are the only
two firms that produce and sell a particular kind of machinery. The
demand curve for their product is P= 580-3Q where P is the price of
the product and Q is the total amount demanded. The total cost
function of the Bergen Company is
TCB = 410QB where TCB is its total cost and QB is its output. The total cost function of the Gutenberg Company is TCG= 460QG where TCGis its total cost and QG is its output. There are competing for a new market.
b) If only one firm enters a new market, how much will each firm produce and will make the profit?
c) If both enter the new market, how much will each firm produce and will make the profit?
d) Complete the game table matrix with the payoffs. What is the Nash EQ?
g) Is this collusion would work? Why or why not?
Solutions
Rahul Sunny answered 1 year agoRelated Solutions
The A Company and the B Company are the only two firms that produce and sell...
The A Company and the B Company are the only two firms that
produce and sell a particular product. The inverse demand curve for
their product is:
P=19-0.5Q
where Q=QA+QB
The companies have identical cost functions:
TCA=3+QA
TCB=3+QB
a) Suppose that the two companies are owned by Cournot
duopolists. Find the output produced by each firm and the market
price. Very briefly explain the steps you take in your
solution.
b)Instead of the Cournot assumption, assume Company A sets its...
Suppose that two identical firms produce widgets and that they are the only firms in the...
Suppose that two identical firms produce widgets and that they
are the only firms in the market. Their costs are given by
C1 = 60 Q1
and
C2 = 60 Q2
where Q1 is the output of Firm 1 and Q2 is the output of Firm 2.
Price is determined by the following demand curve:
P= 2100 − Q where Q=Q1+Q2
Find the Cournot-Nash equilibrium. Calculate the profit of each
firm at this equilibrium. (For all of the following, enter...
Suppose that two identical firms produce widgets and that they are the only firms in the...
Suppose that two identical firms produce widgets and that they
are the only firms in the market. Their costs are given by
C1=60Q1
and
C2=60Q2
where
Q1 is the output of Firm 1 and Q2 is the output of Firm 2. Price
is determined by the following demand curve:
P=2700−Q where Q=Q1+Q2
Find the Cournot-Nash equilibrium. Calculate the profit of each
firm at this equilibrium. (For all of the following, enter a
numeric response rounded to two decimal places.)
When...
Suppose there are only two firms in the market, firm 1 and firm 2. They produce...
Suppose there are only two firms in the market, firm 1 and firm
2. They produce identical products. Firm 1 has a constant marginal
cost where AC1 =MC1 =20, and firm 2 has a constant marginal cost
AC2 =MC2 =8. The market demand function is given by Q = 100 -
0.5P.
a) Find the Cournot Nash Equilibrium price and quantity, write
down the profits for each firm. (Use "q1" to represent output level
for firm 1, and "profit1" to...
Suppose there are two firms operating in a market. The firms produce identical products, and the...
Suppose there are two firms operating in a market. The firms
produce identical products, and the total cost for each firm is
given by C = 10qi, i = 1,2, where qi is the
quantity of output produced by firm i. Therefore the marginal cost
for each firm is constant at MC = 10. Also, the market demand is
given by P = 106 –2Q, where Q= q1 + q2 is the
total industry output.
The following formulas will be...
Two firms, A and B, compete as duopolists in an industry. The firms produce a homogeneous...
Two firms, A and B, compete as duopolists in an industry. The
firms produce a homogeneous good. Each firm has a cost function
given by:
C(q) = 30q + 1.5q2
The (inverse) market demand for the product can be written as:
P =300−3Q, where Q = q1 + q2, total output.
(a) If each firm acts to maximize its profits, taking its
rival’s output as given (i.e., the firms behave as Cournot
oligopolists), what will be the equilibrium quantities selected...
Two firms, A and B, compete as duopolists in an industry. The firms produce a homogeneous...
Two firms, A and B, compete as duopolists in an industry. The
firms produce a homogeneous good. Each firm has a cost function
given by: C(q) = 30q + 1.5q2 The (inverse) market demand
for the product can be written as: P = 300 − 3Q , where Q = q1 +
q2, total output.
Question: If each firm acts to maximize its profits, taking its
rival’s output as given (i.e., the firms behave as Cournot
oligopolists), what will be...
Suppose that two identical firms are selling a product and that they are the only firms...
Suppose that two identical firms are selling a product and that
they are the only firms in the market. Total costs are Ci = 20Qi
for each firm. The market demand curve is P = 80 – 0.5Q where Q =
Q1 + Q2. The Cournot model describes the competition in this
market. Using the above information, complete the below
statements,
a.)If these two firms collude, their combined output is equal
to
b.)If these two firms collude, each firm’s output...
Two identical firms compete in a Bertrand duopoly. The firms produce identical products at the same...
Two identical firms compete in a Bertrand duopoly. The firms
produce identical products at the same constant marginal cost of MC
= $10. There are 2000 identical consumers, each with the same
reservation price of $30 for a single unit of the product (and $0
for any additional units). Under all of the standard assumptions
made for the Bertrand model, the equilibrium prices would be Group
of answer choices $10 for both firms $30 for both firms $50 for
both...
The market consists of 2 firms. The firms produce the same product. Firm 1 with $1...
The market consists of 2 firms. The firms produce the same
product. Firm 1 with $1 per-unit cost
(C1(q1)=1q1 ). Firm 2 with $1
per-unit cost (C2(q2)=1q2 ). Firm
1 can set its price to 2 or 3 or 4 $. Firm 2 can set its price to 2
or 3 or 4 $. The industry's demand function is Q= 10 – P (P-price,
Q- total quantities). The firms choose their quantities
simultaneously.
1a) Find Firm 1 optimal price P1=?...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- The legal landscape is perpetually changing. Psychologists must remain abreast of these changes to avoid potentially...
- We are evaluating a project that costs $1.68 million, has a six-year life, and has no...
- In C++ Having call-by-reference allows one to use storeback parameters, i.e., parameters whose values are transmitted...
- You must evaluate a proposal to buy a new milling machine. The base price is $175,000,...
- “Triangle Guessing” game in Python The program accepts the lengths of three (3) sides of a...
- THIS PROGRAM HAS TO BE WRITTEN IN C Single function to perform the parity computation on...
- Consider a buffer system consisting of Benzoic acid (pKa = 4.20) and sodium benzoate, a) Would...
ADVERTISEMENT