4) Assume, A and B are the only firms which are operating in an oligopolistic market....

4) Assume, A and B are the only firms which are operating in an oligopolistic market. The
equation of the market demand curve is, Q=600-2P, the total cost function of the firm A
is, TCA=0.5and the total cost function of the firm B is, TCB=120qB.
a) Find the market price and quantities if both firms behave as Cournot duopolists.
b) Find the market price and quantities if the firm A behaves as the Stackelberg leader
and firm B behaves as the Stackelberg follower.

Solutions

Expert Solution

Thank you

Rahul Sunny answered 6 months ago

Next > < Previous

Related Solutions

An oligopolistic market structure is distinguished by several characteristics, one of which is market control by a few large firms.

Characteristics of oligopoly An oligopolistic market structure is distinguished by several characteristics, one of which is market control by a few large firms. Which of the following are other characteristics of this market structure? Check all that apply. Difficult entry Mutual interdependence Either similar or identical products Neither mutual interdependence nor mutual dependence No entry

An oligopolistic market structure is distinguished by several characteristics, one of which is market control by a few large firms.

An oligopolistic market structure is distinguished by several characteristics, one of which is market control by a few large firms. Which of the following are other characteristics of this market structure? Check all that apply. Difficult entry Mutual interdependence Ether similar or identical products No entry Neither mutual interdependence nor mutual dependence

describe the various ways in which firms within oligopolistic market structure exercise their market power answer...

describe the various ways in which firms within oligopolistic market structure exercise their market power answer with your own word ( 200 words )

Which statement is not true for a perfectly competitive market? * a-Firms are price takers b-Only...

Which statement is not true for a perfectly competitive market? * a-Firms are price takers b-Only one seller. c-Many buyers. d-No barriers to entry or exit. For a perfectly competitive firm, if total revenue is less than total cost but greater than total variable cost, that means: * a-Price is below average variable cost only b-Price is above average total cost only c-Price is below average total cost but above average variable cost d-Price is below both average total cost...

Suppose the market for smartphones in Australia is oligopolistic with three firms owning the entire market:...

Suppose the market for smartphones in Australia is oligopolistic with three firms owning the entire market: Apple, Samsung and Google. (a) Suppose all the products are unbranded (homogeneous) and all three firms have similar cost functions. What would be the best outcome for consumers in this market and what is the best outcome for the three oligopolists? Which one is the efficient outcome? (b) Suppose Apple can differentiate its smartphone by using a different operating system than the other two...

There are only two firms in the market for airplanes, A and B. The cost functions...

There are only two firms in the market for airplanes, A and B. The cost functions are C(qa) = 12qa and C(qb) = 6qb. The inverse demand function is p = 36 ? qa ? qb. (a) Under Cournot competition, what are the best response functions for the two firms? (b) Under Cournot competition, what is the market price? (c) If firm A moves first, and firm B can observe it, what is the Stackelberg equilibrium price?

list and describe 4 characteristics of an oligopolistic market structure

Problem 2. Assume the market is perfectly competitive. There are 100 firms currently operating in the...

Problem 2. Assume the market is perfectly competitive. There are 100 firms currently operating in the market. The cost function for each firm is given by c(q) = 25 + 2q + q 2 , and the demand function is Q = 1024−2p. • Derive the current market price and total output in equilibrium. (Hint: Q = 100q) • Given the above answer, is the market in the long-run equilibrium right now? If not, what are the equilibrium levels of...

Question 1 The behavior of oligopolistic firms is interdependent. One way of demonstrating how oligopolistic firms...

Question 1 The behavior of oligopolistic firms is interdependent. One way of demonstrating how oligopolistic firms may behave is chaos theory /game theory, which shows that most cartel agreements maybe __________________________ as firms have incentive to _____________________________. Question 2 The intent of anti-trust legislation is to promote _______________________________ and prevent formation of ___________________________________. Some examples of anti-trust laws are _________________________________________________.

Question 2: In an oligopolistic market, firms pay close attention to the strategies of their rivals....

Question 2: In an oligopolistic market, firms pay close attention to the strategies of their rivals. In monopolistic competition, with a large number of sellers, it is assumed that there is not this kind of rivalry, or interdependence. Why is there probably some rivalry in many monopolistically competitive markets? You also must cover the oligopolistic market.

Subjects