Two firms compete in selling file-encryption software. Because both firms use the same encryption standard, files...
Suppose two firms compete by selecting quantities q1 and q2, respectively, with the market price given by p = 1000-3q1 -3q2. Firm 1 (the incumbent) is already in the market. Firm 2 (the potential entrant) must decide whether or not to enter and, if she enters, how much to produce. First the incumbent commits to its production level q2. The potential entrant, having seen q1, decides whether to enter the industry. If firm 2 chooses to enter, then it selects...
Two profit-maximizing firms compete in a market. Firm 1 chooses quantity qı > 0 and Firm 2 chooses quantity 42 > 0. The market price is: p(91,92) = 8 - 2q1 - 42. The cost to Firm 1 of producing qi is C1 = 41. The cost to Firm 2 of producing 92 is C2 = 42 + 42. a.) * Calculate the best-response function for each firm. b.) Suppose the two firms choose their quantities simultaneously. What is the...
2. Two firms produce homogeneous products. Market demand is given by Q = 40-P, and each firm faces a marginal cost of production of 4 per unit The timing of the game is as follows. In Period 1, firm 1 chooses the quantity q it will sell. In Period 2, firm 2 (who observed firm 1s choice in period 1) chooses whether or not to enter the market. If firm 2 chooses to enter it must pay an entry fee...
1. Consider a market with two firms, providing substitutable products. The inverse demand function faced by firm i (i=1,2) is Pi ( 91, 92)=100-2q1-dq2. d=2 and the marginal cost of these two firms are cl=0, c2=$10, respectively. Suppose that firm 1 sets price first and firm 2 decides its price after observing firm l's price, what is the equilibrium price charged by firm 1 and firm 2? A) Firm 1 chargers 0, firm 2 chargers $10 B) Firm 1 chargers...
7. Two firms compete in a market by selling differentiated products. The demand equations are given by the following equations: P2 qı = 75 – Pi + 2 P1 92 = 75 – P2 + 2 assume that each firm has a marginal cost (and average costs) of O. a. Solve for firm l's best response function. b. Solve for the equilibrium price and quantity. C. Would firm 1 still be able to compete in the market if their marginal...
only two firms in the industry of eanera , A long time ago, Kodak and Fuji the identical cos t structure were thinking of advertising their product at an exhausting rate, a mild not advertising at all. Assume that currently they share a profit of $54 million each S60 million and by a mild rate $45 reaches $105 if both advertise By advertising at an exhausting rate results in a cost of million for each firm. On the other hand...
The diagram shows the extensive form version of a strategic game between the two nationally dominant coffee sellers, Corporate Coffee and Jumbo Java, both of whom are considering opening coffee shops in a new town. The payoffs represent, in thousands per month, the profit (or loss) the firm will realize from its decision. Assuming the two firms have perfect information about this game, what can we conclude about the existence of a Nash equilibrium? Select one: A. The solution to...
Declining Industry: Consider two competing firms in a declining industry that cannot support both firms profitably. Each firm has three possible choices, as it must decide whether or not to exit the industry immediately, at the end of this quarter, or at the end of the next quarter. If a firm chooses to exit then its payoff is 0 from that point onward. Each quarter that both firms operate yields each a loss equal to -1, and each quarter that...
1) Decreasing returns to scale may occur as increasing the amount of inputs used A) increases specialization B) may cause coordination difficulties. C) always increases the amount of output produced D) increases efficiency. 2) Which of the following statements is NOT true? A) AFC = AC - AVC C) AVC = wage/MPL B) AC = AFC + AVC D) C=F-VC 3) The more elastic the demand curve, a monopoly A) will have a larger Lemer Index. will face a lower...
Solve it for java Question Remember: You will need to read this assignment many times to understand all the details of the you need to write. program Goal: The purp0se of this assignment is to write a Java program that models an elevator, where the elevator itself is a stack of people on the elevator and people wait in queues on each floor to get on the elevator. Scenario: A hospital in a block of old buildings has a nearly-antique...