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4. Consider 2 firms selling fertilizer competing as Cournot duopolists. The inverse demand function facing the...
Cournot vs. Stackelberg Oligopoly Suppose the inverse demand function and the cost functions for two duopolists...
Cournot vs. Stackelberg Oligopoly Suppose the inverse demand function and the cost functions for two duopolists are given by: P = 100 – (Q1 + Q2) C1(Q1) = 2Q1 C2(Q2) = 2Q2 a. Cournot: Assume two Cournot duopolists. i. What is firm 1’s Quantity and Profit? R1 = (100-Q1-Q2) * Q1 R1 = 100Q1 - Q12 - Q2Q1 MR1 = 100 - 2Q1 - Q2 C1(Q1) = 2Q1 MC1 = 2 MR1 = MC1 ii. What is firm 2’s Quantity...
Suppose that the inverse market demand for a commodity is given by P = 240 Q...
Suppose that the inverse market demand for a commodity is given by P = 240 Q The cost curves of the three firms which could serve this market are TC,(a) 30q +300 and TC2() (d) Suppose that firms engage in Stackelberg rather than Cournot competition. Firm 1 moves first by choosin its output level. After Firm 1 has chosen its output level, Firm 2 observes ql and chooses its output leve Find the subgame-perfect Nash equilibrium of the Stackelberg game....
Suppose there is a duopoly of two identical firms, A and B, facing a market inverse...
Suppose there is a duopoly of two identical firms, A and B, facing a market inverse demand of ?=640−2?, and cost functions of ?? =40?? and ?? =40?? respectively. Find the Cournot-Nash equilibrium and profit for each firm. Suppose that A acts as the leader in a Stackelberg model and B responds. What are the respective quantities and profits of each firm now? Is it advantageous to move first? What are the prices, quantities and profits for the firms if...
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 two identical Cournot firms that have zero marginal cost facing the market inverse demand function:...
Consider two identical Cournot firms that have zero marginal cost facing the market inverse demand function: P = 100−1/2 Q What is the quantity produced by each firm? Round your answer to the nearest 1 decimal places.
The market demand function is Q = 10000 - 1000p Each firm has a marginal cost...
The market demand function is Q = 10000 - 1000p Each firm has a marginal cost of m=$0.28. Firm 1, the leader, acts before Firm 2, the follower. Solve for the Stackelberg-Nash equilibrium quantities, prices, and profits. Compare your solution to the Cournot-Nash equilibrium. The Stackelberg-Nash equilibrium quantities are q1 = ____ units and q2= ____ units. (Enter your responses as whole numbers.) The Stackelberg-Nash equilibrium price is: p=$_____________ Profits for the firms are profit1=$_______________ and profit2=$_______________ The Cournot-Nash equilibrium...
Consider a Cournot game with 2 firms. Inverse demand function is given by P = 20...
Consider a Cournot game with 2 firms. Inverse demand function is given by P = 20 - (91 +92). The firm has MC=AC=5. Firms choose qi e 0,00) a) Find the Nash equilibrium (9:47). Calculate profits in equilibrium. b) Now suppose that a firm also has to pay a fixed cost of 20 if it produces some output. Write down the cost function of the firm. c) Find the Nash equilibrium (91:97) fixed costs are 20. Calculate equilibrium profits. How...
Consider a Cournot game with 2 firms. Inverse demand function is given by P= 20 –...
Consider a Cournot game with 2 firms. Inverse demand function is given by P= 20 – (91 +92). The firm has MC=AC=5. Firms choose qi € (0,0) a) Find the Nash equilibrium (9*.*). Calculate profits in equilibrium. b) Now suppose that a firm also has to pay a fixed cost of 20 if it produces some output. Write down the cost function of the firm. c) Find the Nash equilibrium (9.97) fixed costs are 20. Calculate equilibrium profits. How does...
2*. Consider a market with two firms where the inverse demand function is given by p...
2*. Consider a market with two firms where the inverse demand function is given by p = 28 - 2q and where q = q1 + q2. Each firm has the total cost function c(qi) = 4qi, where i = {1,2}. a) Compare price level, quantities and profits in this market calculating the Cournot equilibrium and the Stackelberg equilibrium. Draw a graph with best response functions and illustrate the Cournot and Stackelberg solutions in that graph. b) Compare your solutions...
2*. Consider a market with two firms where the inverse demand function is given by p...
2*. Consider a market with two firms where the inverse demand function is given by p = 28 - 2q and where q = q1 + q2. Each firm has the total cost function c(qi) = 4qi, where i = {1,2}. a) Compare price level, quantities and profits in this market calculating the Cournot equilibrium and the Stackelberg equilibrium. Draw a graph with best response functions and illustrate the Cournot and Stackelberg solutions in that graph. b) Compare your solutions...
Suppose that the inverse market demand for a commodity is given by P = 240 Q The cost curves of the three firms which could serve this market are TC,(a) 30q +300 and TC2() (d) Suppose that firms engage in Stackelberg rather than Cournot competition. Firm 1 moves first by choosin its output level. After Firm 1 has chosen its output level, Firm 2 observes ql and chooses its output leve Find the subgame-perfect Nash equilibrium of the Stackelberg game....
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 Cournot game with 2 firms. Inverse demand function is given by P = 20 - (91 +92). The firm has MC=AC=5. Firms choose qi e 0,00) a) Find the Nash equilibrium (9:47). Calculate profits in equilibrium. b) Now suppose that a firm also has to pay a fixed cost of 20 if it produces some output. Write down the cost function of the firm. c) Find the Nash equilibrium (91:97) fixed costs are 20. Calculate equilibrium profits. How...
Consider a Cournot game with 2 firms. Inverse demand function is given by P= 20 – (91 +92). The firm has MC=AC=5. Firms choose qi € (0,0) a) Find the Nash equilibrium (9*.*). Calculate profits in equilibrium. b) Now suppose that a firm also has to pay a fixed cost of 20 if it produces some output. Write down the cost function of the firm. c) Find the Nash equilibrium (9.97) fixed costs are 20. Calculate equilibrium profits. How does...
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