In the market of cars, there are two firms operating. The Industry Demand Curve is a...
In the market of cars, there are two firms operating. The Industry Demand Curve is a function of the outputs being produced by both firms, and is given as: P = 240−(X1+X2), where X1 and X2 are the outputs of Firm 1 and Firm 2 respectively. The Total Cost faced by Firm 1 is TC1 = 20X1 and by Firm 2 is TC2 = 20X2. Each firm maximizes its own profit by choosing its own output, while taking the output of the other firm as given. Write down the profit function of each firm, and find the level of output for each firm that will maximize its profit. What are the corresponding levels of prices and profits for each firm?
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In the market of cars, there are two firms operating. The
Industry Demand Curve is a...
In the market of cars, there are two firms operating. The Industry Demand Curve is a...
In the market of cars, there are two firms operating. The Industry Demand Curve is a function of the outputs being produced by both firms, and is given as: P = 240−(X1+X2), where X1 and X2 are the outputs of Firm 1 and Firm 2 respectively. The Total Cost faced by Firm 1 is TC1 = 20X1 and by Firm 2 is TC2 = 20X2. Each firm maximizes its own profit by choosing its own output, while taking the output...
ECON M?C There are two firms in an industry. The industry demand curve is given by...
ECON M?C
There are two firms in an industry. The industry demand curve is given by p = 60 - q. Each firm has one manufacturing plant and each firm i has a cost function C(q) = 97, where qi is the output of firm i. The two firms form a cartel and arrange to split total industry profits equally. Under this cartel arrangement, they will maximize joint profits if Select one: O a. each firm produces 15 units in...
Two identical firms compete as a Cournot duopoly. The inverse market demand they face is P...
Two identical firms compete as a Cournot duopoly. The inverse market demand they face is P = 120-2Q. The total cost function for each firm is TC1(Q) = 4Q1. The total cost function for firm 2 is TC2(Q) = 2Q2. What is the output of each firm? Find: Q1 = ? Q2 = ?
3) Suppose that an industry consists of two firms that produces a homogeneous product. Suppose that...
3) Suppose that an industry consists of two firms that produces a homogeneous product. Suppose that each firm decides how much to produce and assumes that its rival will not alter its level of production in response (Cournot Model). The industry demand equation is: P 145 5(Q1+ Q2) where Qland Q2 represents the output of Firm 1 and Firm 2, respectively. The total cost equations of the two firms are: TCF 3Q1 and TCF 5Q2 A, Calculate each firm's Best...
The inverse market demand is P=160 – 4Q. The firms have cost functions TC1 = 8+12q1+2q1²...
The inverse market demand is P=160 – 4Q. The firms have cost functions TC1 = 8+12q1+2q1² TC2 = 8+12q2+2q2² a. Determine monopoly profit-maximizing output for each firm. Determine the industry profit-maximizing output under collusion. Calculate the equilibrium price under collusion. Determine if the firms should collude. Assume your initial game is Cournot. Joint profits Profits Collusion = $1079.2 Profits Cournot = 1010.75 Profits Stackelberg = 971.17 Profit monopoly 1 = 904.67 Profits monopoly 2 = 904.67 Collude since...
Exercise 8 Question Help Suppose the airline industry consisted of only two firms: American and Texas...
Exercise 8 Question Help Suppose the airline industry consisted of only two firms: American and Texas Air Corp. Let the two firms have identical cost functions, C(q) = 50q. Assume that the demand curve for the industry is given by P = 190-Q and that each firm expects the other to behave as a Cournot competitor. Calculate the Cournot-Nash equilibrium for each firm, assuming that each chooses the output level that maximizes its profits when taking its rival's output as...
Two firms A and B control the market for mouth guards and face a market demand...
Two firms A and B control the market for mouth guards and face a market demand curve for mouth guards given by Q = 320 − 4P where Q is the total sales of mouth guards. The short-run cost curves of the two firms are given by SRTCA = 2090 + (q2A)/4 SRTCB = 1045 + (q2B)/2 a) If the two firms agree to collude in order to maximize their joint profits, what will be output of each firm and...
2. (30 pts) There are two firms in a market, producing the same good. The firms...
2. (30 pts) There are two firms in a market, producing the same good. The firms simultaneously choose their output levels, qı for firm 1 and q2 for firm 2. The price adjusts according to the inverse demand function p= 65 – (91 +92). Each firm has a per-unit (average) cost of 5. Each firm's payoff is its profit. a. (5 pts) Find firm l's profit as a function of qı and q2 (profit equals revenue minus total cost). b....
PROBLEM #1 Consider a market with two firms that sell products that are identical. Su market dema...
PROBLEM #1 Consider a market with two firms that sell products that are identical. Su market demand is as follows: P-56-Q , where Q measures the total output produced by both firms (that is, Q=q +q.) and qi and q, are the quantities produced by firm 1 and firm 2, respectively. The per-unit cost of production is $6 for each firm, and so the firm's cost functions are 6q, and 6q, respectively. Each firm seeks to maximize profits. The firms...
The can industry is composed of two firms. Suppose that the demand curve for cans is...
The can industry is composed of two firms. Suppose that the demand curve for cans is P= 100- Q and total cost function of each firm is TC = 2 + 15q. b) If only one firm enters new market, how much will each firm produce and will make the profit? c) If both enter the new market, how much will each firm produce and will make the profit? e) If these two firms collude and they want to maximize...
ECON M?C
There are two firms in an industry. The industry demand curve is given by p = 60 - q. Each firm has one manufacturing plant and each firm i has a cost function C(q) = 97, where qi is the output of firm i. The two firms form a cartel and arrange to split total industry profits equally. Under this cartel arrangement, they will maximize joint profits if Select one: O a. each firm produces 15 units in...
3) Suppose that an industry consists of two firms that produces a homogeneous product. Suppose that each firm decides how much to produce and assumes that its rival will not alter its level of production in response (Cournot Model). The industry demand equation is: P 145 5(Q1+ Q2) where Qland Q2 represents the output of Firm 1 and Firm 2, respectively. The total cost equations of the two firms are: TCF 3Q1 and TCF 5Q2 A, Calculate each firm's Best...
Exercise 8 Question Help Suppose the airline industry consisted of only two firms: American and Texas Air Corp. Let the two firms have identical cost functions, C(q) = 50q. Assume that the demand curve for the industry is given by P = 190-Q and that each firm expects the other to behave as a Cournot competitor. Calculate the Cournot-Nash equilibrium for each firm, assuming that each chooses the output level that maximizes its profits when taking its rival's output as...
2. (30 pts) There are two firms in a market, producing the same good. The firms simultaneously choose their output levels, qı for firm 1 and q2 for firm 2. The price adjusts according to the inverse demand function p= 65 – (91 +92). Each firm has a per-unit (average) cost of 5. Each firm's payoff is its profit. a. (5 pts) Find firm l's profit as a function of qı and q2 (profit equals revenue minus total cost). b....
PROBLEM #1 Consider a market with two firms that sell products that are identical. Su market demand is as follows: P-56-Q , where Q measures the total output produced by both firms (that is, Q=q +q.) and qi and q, are the quantities produced by firm 1 and firm 2, respectively. The per-unit cost of production is $6 for each firm, and so the firm's cost functions are 6q, and 6q, respectively. Each firm seeks to maximize profits. The firms...
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