Exercise 1 Let consider the Cournot game with I = {1, 2}, let the inverse demand...
Two firms compete in a market to sell a homogeneous product with inverse demand function. P = 500 – 2Q. Each firm produces at a constant marginal cost of $100 and has no fixed costs. Use this information to compare the output levels and profits in settings characterized by Cournot, Stackelberg, Bertrand, and collusive behavior. Show the detail of your work and summarize your results in a table. Outputs Profits il= Cournot 12= Stackelberg Ql= Q2= Q1= Q2= Ql= Q2=...
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 = ?
Exercise 5 Let us consider a market where 4 firms compete à la Bertrand. The demand function is given by q() = 250 - 7p. The cost function is the same for both firms and it is C(q) = 100; for all i E {1,2,3,4} • Write explicitly the demand and profit functions of 1, 2, 3, and 4. • Derive best reply functions and the Nash equilibrium of the game. (9) = 591, what • If firm 1 find...
Exercise 3 Let us consider a market where 3 firms I = {1, 2, 3} compete `a la Cournot (quantity-setting competition). The inverse demand function is given by p(Q) = 300 − 5Q, where Q = q1 + q2 + q3. The cost function is homogeneous and it is C1(q) = C2(q) = C3(q) = 30q. • Write explicitly the profit functions of each i ∈ I. • Derive best reply functions and the Nash equilibrium of the game. •...
Let us consider a market where 3 firms I = {1, 2, 3} compete `a la Cournot (quantity-setting competition). The inverse demand function is given by p(Q) = 300 − 5Q, where Q = q1 + q2 + q3. The cost function is homogeneous and it is C1(q) = C2(q) = C3(q) = 30q. Write explicitly the profit functions of each i ∈ I. Derive best reply functions and the Nash equilibrium of the game.
Two firms compete in a market to sell a homogeneous product with inverse demand function P = 600 – 6Q. Each firm produces at a constant marginal cost of $300 and has no fixed costs. Use this information to compare the output levels and profits in settings characterized by Cournot, Stackelberg, Bertrand, and collusive behavior. Please show steps.
In Cournot duopoly , the inverse demand function is P=150-Q Firm 1 and Firm costs are C1=1000+12q1 and C2=2000+6q2 What is the profit maximization , best reaction function to find Nash equilibrium Price
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...
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...
4. Consider 2 firms selling fertilizer competing as Cournot duopolists. The inverse demand function facing the fertilizer market is P = 1 - where Q = 94 +98. For simplicity, assume that the long-run marginal cost for each firm is equal to X, i.e. C(q)=Xq for each firm. a) Find the Cournot Nash equilibrium where the firms choose output simultaneously b) Find the Stackelberg Nash Equilibrium where firm A as the Stackelberg leader. How much does the leader gain by...