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When two firms compete in ptice then it is Bertrand model. Equilibrium condition is where firm's MC = MR.
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4. Homogenous product Bertrand. Suppose that the demand for marbles is given by Q- 80 -...
Suppose that the demand for marbles is given by Q= 80-5p, where Q is measured in...
Suppose that the demand for marbles is given by Q= 80-5p, where
Q is measured in bags of marbles. There are two firms that supply
the market, and the firms produce identical marbles (i.e., they are
homogenous products). Firm 1 has a constant
marginal cost of $10.00/bag, while firm 2 has a constant
marginal cost of $5.00/bag.
5. Homogenous product Bertrand with 3 firms, Now suppose that there are three firms in the market, all producing identical marbles. Firms 1...
Please help me with this problem 6. Differentiated product Bertrand. Suppose that firm Y produces yellow...
Please help me with this
problem
6. Differentiated product Bertrand. Suppose that firm Y produces yellow marbles and that firm W produces white marbles. Further suppose that consumers' tastes are heterogeneous-some prefer yellow marbles while others prefer white ones. Firm-specific demands are given by: The subscripts y and w refer to yellow and white marbles, respectively (a) Suppose both firms have a marginal cost of $15/bag. What are the price and quantity sold (b) Now suppose that firm W has...
Problem 3- Bertrand Consider 2 firms selling a homogenous product with market demand as below: Q...
Problem 3- Bertrand Consider 2 firms selling a homogenous product with market demand as below: Q = 110-P Firm 1's marginal cost is 10 per unit, firm 2's is 5 per unit. The firms compete on price, not quantity. What is the equilibrium production of each firm, and what is each firm's profit?
Problem 4. Bertrand Competition with Different Costs Suppose two firms facing a demand D(p) compete by...
Problem 4. Bertrand Competition with Different Costs Suppose two firms facing a demand D(p) compete by setting prices simultaneously (Bertrand Competition). Firm 1 has a constant marginal cost ci and Firm 2 has a marginal cost c2. Assume ci < C2, i.e., Firm 1 is more efficient. Show that (unlike the case with identical costs) p1 = C1 and P2 = c2 is not a Bertrand equilibrium.
Problem 4. Bertrand Competition with Different Costs Suppose two firms facing a demand D(p) compete by setting prices s...
Problem 4. Bertrand Competition with Different Costs Suppose two firms facing a demand D(p) compete by setting prices simultaneously (Bertrand Competition). Firm 1 has a constant marginal cost ci and Firm 2 has a marginal cost c2. Assume ci < C2, i.e., Firm 1 is more efficient. Show that (unlike the case with identical costs) p1 = (1 and p2 = c2 is not a Bertrand equilibrium.
consider the standard Bertrand model of price competition. There are two firms that produce a homogenous...
consider the standard Bertrand model of price competition. There
are two firms that produce a homogenous good with the same constant
marginal cost of c.
a) Suppose that the rule for splitting up cunsumers when the
prices are equal assigns all consumers to firm1 when both firms
charge the same price. show that (p1,p2) =(c,c) is a Nash
equilibrium and that no other pair of prices is a Nash
equilibrium.
b) Now, we assume that the Bertrand game in part...
Problem 1: Suppose that the market demand function is given by q-80-2p. All firms in the...
Problem 1: Suppose that the market demand function is given by q-80-2p. All firms in the industry have marginal cost of 10 and no fixed cost. In this problem, the firms compete in quantities. (a) What is the equilibrium price, quantity, consumer surplus, profit (producer surplus) and deadweight loss if there is only one firm in the industry? (b) Now answer the same question if there are two firms in the industry (duopoly). How does your answer compare to the...
EC202-5-FY 10 9Answer both parts of this question. (a) Firm A and Firm B produce a homogenous good and are Cournot duopolists. The firms face an inverse market demand curve given by P 10-Q. where...
EC202-5-FY 10 9Answer both parts of this question. (a) Firm A and Firm B produce a homogenous good and are Cournot duopolists. The firms face an inverse market demand curve given by P 10-Q. where P is the market price and Q is the market quantity demanded. The marginal and average cost of each firm is 4 i. 10 marks] Show that if the firms compete as Cournot duopolists that the total in- dustry output is 4 and that if...
Consider a Bertrand duopoly in a market where demand is given by Q firm has constant marginal cost equal to 20 100 - P. Each (a) If the two firms formed a cartel, what would they do? How much profit...
Consider a Bertrand duopoly in a market where demand is given by Q firm has constant marginal cost equal to 20 100 - P. Each (a) If the two firms formed a cartel, what would they do? How much profit would eaclh firm make? (6 marks) (b) Explain why the outcome in part (a) is not a Nash Equilibrium. Find the set of Nash Equilibria and explain why it/they constitute Nash equilibria. (6 marks) (c) Now suppose that instead of...
Q4. There are two firms A and B in a homogenous product industry. Inverse demand is...
Q4. There are two firms A and B in a homogenous product industry. Inverse demand is P = 120 Q where Q is the combined output of the firms. Firm A has a marginal cost of 0 and firm B has a marginal cost of 10. There is an infinite sequence of periods in which firms simultaneously set prices. In this question we will consider whether the following collusive strategies with trigger strategy punish- ments are a subgame perfect Nash...
Suppose that the demand for marbles is given by Q= 80-5p, where
Q is measured in bags of marbles. There are two firms that supply
the market, and the firms produce identical marbles (i.e., they are
homogenous products). Firm 1 has a constant
marginal cost of $10.00/bag, while firm 2 has a constant
marginal cost of $5.00/bag.
5. Homogenous product Bertrand with 3 firms, Now suppose that there are three firms in the market, all producing identical marbles. Firms 1...
Please help me with this
problem
6. Differentiated product Bertrand. Suppose that firm Y produces yellow marbles and that firm W produces white marbles. Further suppose that consumers' tastes are heterogeneous-some prefer yellow marbles while others prefer white ones. Firm-specific demands are given by: The subscripts y and w refer to yellow and white marbles, respectively (a) Suppose both firms have a marginal cost of $15/bag. What are the price and quantity sold (b) Now suppose that firm W has...
Problem 3- Bertrand Consider 2 firms selling a homogenous product with market demand as below: Q = 110-P Firm 1's marginal cost is 10 per unit, firm 2's is 5 per unit. The firms compete on price, not quantity. What is the equilibrium production of each firm, and what is each firm's profit?
Problem 4. Bertrand Competition with Different Costs Suppose two firms facing a demand D(p) compete by setting prices simultaneously (Bertrand Competition). Firm 1 has a constant marginal cost ci and Firm 2 has a marginal cost c2. Assume ci < C2, i.e., Firm 1 is more efficient. Show that (unlike the case with identical costs) p1 = C1 and P2 = c2 is not a Bertrand equilibrium.
Problem 4. Bertrand Competition with Different Costs Suppose two firms facing a demand D(p) compete by setting prices simultaneously (Bertrand Competition). Firm 1 has a constant marginal cost ci and Firm 2 has a marginal cost c2. Assume ci < C2, i.e., Firm 1 is more efficient. Show that (unlike the case with identical costs) p1 = (1 and p2 = c2 is not a Bertrand equilibrium.
consider the standard Bertrand model of price competition. There
are two firms that produce a homogenous good with the same constant
marginal cost of c.
a) Suppose that the rule for splitting up cunsumers when the
prices are equal assigns all consumers to firm1 when both firms
charge the same price. show that (p1,p2) =(c,c) is a Nash
equilibrium and that no other pair of prices is a Nash
equilibrium.
b) Now, we assume that the Bertrand game in part...
Problem 1: Suppose that the market demand function is given by q-80-2p. All firms in the industry have marginal cost of 10 and no fixed cost. In this problem, the firms compete in quantities. (a) What is the equilibrium price, quantity, consumer surplus, profit (producer surplus) and deadweight loss if there is only one firm in the industry? (b) Now answer the same question if there are two firms in the industry (duopoly). How does your answer compare to the...
EC202-5-FY 10 9Answer both parts of this question. (a) Firm A and Firm B produce a homogenous good and are Cournot duopolists. The firms face an inverse market demand curve given by P 10-Q. where P is the market price and Q is the market quantity demanded. The marginal and average cost of each firm is 4 i. 10 marks] Show that if the firms compete as Cournot duopolists that the total in- dustry output is 4 and that if...
Consider a Bertrand duopoly in a market where demand is given by Q firm has constant marginal cost equal to 20 100 - P. Each (a) If the two firms formed a cartel, what would they do? How much profit would eaclh firm make? (6 marks) (b) Explain why the outcome in part (a) is not a Nash Equilibrium. Find the set of Nash Equilibria and explain why it/they constitute Nash equilibria. (6 marks) (c) Now suppose that instead of...
Q4. There are two firms A and B in a homogenous product industry. Inverse demand is P = 120 Q where Q is the combined output of the firms. Firm A has a marginal cost of 0 and firm B has a marginal cost of 10. There is an infinite sequence of periods in which firms simultaneously set prices. In this question we will consider whether the following collusive strategies with trigger strategy punish- ments are a subgame perfect Nash...
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