Homework Answers
STATEMENT (C) IS FALSE
AS, In a market of duopoly firms, the surviving firms has a liberty of setting predatory price, so it wouldnot be rational to set the price equal to marginal cost as it wouldnot make any profit in such scenario. so the given statement is false
Statement A and Statement B is true as in monopoly the equilibrium price is greater than marginal cost but still lower than price charged by monopoly firms.
Add Answer to:
2.2 Bertrand Competition Which of the following statement is NOT true? In a market of duopoly...
2. (16 points) Monopoly and Bertrand opoly and Bertrand Duopoly. In a monopoly market, the de...
2. (16 points) Monopoly and Bertrand opoly and Bertrand Duopoly. In a monopoly market, the de mand is p = 240 - 20. The firm's cost function is: for Q>O, C(Q) = 40 (a) Find the monopoly quantity and price.. Q = and PM = (b) Find the deadweight loss in the monopoly model. DWL = (c) If instead there are two identical firms that compete according to Bertrand price competition, is the equilibrium price? Pi = p = ____...
2. (Cournot Model) Consider a Cournot duopoly. The market demand is p=160 - q2. Firm 1's...
2. (Cournot Model) Consider a Cournot duopoly. The market demand is p=160 - q2. Firm 1's marginal cost is 10, and firm 2's marginal cost is also 10. There are no fixed costs. A. Derive each firm's best response function B. What is the Nash equilibrium of this model? Find the equilibrium market price. C. Find the equilibrium profit for each firm D. Find the equilibrium consumer surplus in this market. 3. (Bertrand Model) Consider a Bertrand duopoly. The market...
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...
4. Bertrand Competition (29 points) Consider a Betrand Model. The market demand is P=130-Q. Consumers only...
4. Bertrand Competition (29 points) Consider a Betrand Model. The market demand is P=130-Q. Consumers only buy from the firm charging a lower price. If the two firms charge the same price. they share the market equally. The marginal cost for firm 1 is 10, and the marginal cost for firm 2 is also 10. There are no fixed costs. A. (5 points) Would any firm charge a price below 10 at the market equilibrium? Briefly explain your reason. B....
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.
4. Bertrand Competition (29 points) Consider a Betrand Model. The market demand is P-180-Q. Consumers only...
4. Bertrand Competition (29 points) Consider a Betrand Model. The market demand is P-180-Q. Consumers only buy from the firm charging a lower price. If the two firms charge the same price, they share the market equally. The marginal cost for firm 1 is 30, and the marginal cost for firm 2 is also 30. There are no fixed costs. A. (5 points) Would any firm charge a price below 30 at the market equilibrium? Briefly explain your reason B....
Suppose four firms engage in price competition in Bertrand setting in which the lowest-price firm will...
Suppose four firms engage in price competition in Bertrand setting in which the lowest-price firm will capture the entire market. The firms differ with respect to their costs: ? Firm A’s marginal cost per unit is 8 USD ? Firm B’s marginal cost per unit is 7 USD ? Firm C’s marginal cost per unit is 9 USD ? Firm D’s marginal cost per unit is 7.5 USD (a) Which firm will serve the market? What price it would charge?...
4. Bertrand Competition (29 points) Consider a Betrand Model. The market demand is P-130-Q, Consumers only buy from...
4. Bertrand Competition (29 points) Consider a Betrand Model. The market demand is P-130-Q, Consumers only buy from the firm charging a lower price. If the two firms charge the same price, they share the market equally. The marginal cost for firm 1 is 10, and the marginal cost for firm 2 is also 10. There are no fixed costs. A. (5 points) Would any firm charge a price below your reason. at the market equilibrium? Briefly explain B. (6...
1 (Bertrand Model with sequential move) Consider a Bertrand duopoly model with two firms, Fi and...
1 (Bertrand Model with sequential move) Consider a Bertrand duopoly model with two firms, Fi and Fa selling two varieties of a product. The demand curve for Fi's product is 91 (pi,P2) = 10-Pl + 0.5p2: and the demand for F's product is where p is the price charged by F). Both firms have a constant marginal cost of (a) Write down the profits of F1 and F2 as a function of prices P1 and P2. You have b) Derive...
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.
2. (16 points) Monopoly and Bertrand opoly and Bertrand Duopoly. In a monopoly market, the de mand is p = 240 - 20. The firm's cost function is: for Q>O, C(Q) = 40 (a) Find the monopoly quantity and price.. Q = and PM = (b) Find the deadweight loss in the monopoly model. DWL = (c) If instead there are two identical firms that compete according to Bertrand price competition, is the equilibrium price? Pi = p = ____...
2. (Cournot Model) Consider a Cournot duopoly. The market demand is p=160 - q2. Firm 1's marginal cost is 10, and firm 2's marginal cost is also 10. There are no fixed costs. A. Derive each firm's best response function B. What is the Nash equilibrium of this model? Find the equilibrium market price. C. Find the equilibrium profit for each firm D. Find the equilibrium consumer surplus in this market. 3. (Bertrand Model) Consider a Bertrand duopoly. The market...
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...
4. Bertrand Competition (29 points) Consider a Betrand Model. The market demand is P=130-Q. Consumers only buy from the firm charging a lower price. If the two firms charge the same price. they share the market equally. The marginal cost for firm 1 is 10, and the marginal cost for firm 2 is also 10. There are no fixed costs. A. (5 points) Would any firm charge a price below 10 at the market equilibrium? Briefly explain your reason. B....
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.
4. Bertrand Competition (29 points) Consider a Betrand Model. The market demand is P-180-Q. Consumers only buy from the firm charging a lower price. If the two firms charge the same price, they share the market equally. The marginal cost for firm 1 is 30, and the marginal cost for firm 2 is also 30. There are no fixed costs. A. (5 points) Would any firm charge a price below 30 at the market equilibrium? Briefly explain your reason B....
4. Bertrand Competition (29 points) Consider a Betrand Model. The market demand is P-130-Q, Consumers only buy from the firm charging a lower price. If the two firms charge the same price, they share the market equally. The marginal cost for firm 1 is 10, and the marginal cost for firm 2 is also 10. There are no fixed costs. A. (5 points) Would any firm charge a price below your reason. at the market equilibrium? Briefly explain B. (6...
1 (Bertrand Model with sequential move) Consider a Bertrand duopoly model with two firms, Fi and Fa selling two varieties of a product. The demand curve for Fi's product is 91 (pi,P2) = 10-Pl + 0.5p2: and the demand for F's product is where p is the price charged by F). Both firms have a constant marginal cost of (a) Write down the profits of F1 and F2 as a function of prices P1 and P2. You have b) Derive...
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.
Most questions answered within 3 hours.
-
What is the mechanism of phthalic acid and m-xylene which
results in 2-(2,4-dimethylbenzoyl) benzoic acid ?...
asked 6 minutes ago -
describe business writing is
audience oriented
purposeful
Economical
asked 8 minutes ago -
Please explain how to solve these problems without using
excel.
A zero coupon bond has a...
asked 14 minutes ago -
Choose a disease that is caused by a defect in cell signaling.
Explain the cause of...
asked 14 minutes ago -
Oxford Company has limited funds available for investment and
must ration the funds among four competing...
asked 17 minutes ago -
Put your name on the first line in camelCase. Write a JavaScript
function to generate a...
asked 28 minutes ago -
Chapter 7 Telecommunications, the Internet, and Wireless
Technology:
Discuss some of the Internet services available to...
asked 31 minutes ago -
1. The college bookstore tells prospective students
that the average cost of its textbooks is $52...
asked 33 minutes ago -
A 2.5 kg block rests on a 30 ∘ slope and is attached by a string...
asked 43 minutes ago -
In C++ code language please:
1. Created a linked list
2. Insert 5 values: 1, 10,...
asked 46 minutes ago -
By analogy with automobiles, defects in cancer critical genes
have been likened to broken brakes and...
asked 1 hour ago -
Supposing Delta is an example of a very large US commercial
airline, how does the magnitude...
asked 1 hour ago