Coke and Pepsi compete in price competition. However, their products are differentiated – people can taste the difference!
Demand for Coke is given by Qc= 28-4Pc+0.1Pp.
Demand for Pepsi is given by Qp = 24-2Pp+0.1Pc.
The (constant) marginal cost for Coke is 3.
The (constant) marginal cost for Pepsi is 4.
What is the equilibrium price of Coke in this one-shot, simultaneous move game? Give your answer to two decimal places, for example, XX.XX.
Coke and Pepsi compete in price competition. However, their products are differentiated – people can taste...
Suppose the demand for Pepsi is qp = 54 - 2pp + 1p. The demand for Coke is qc = 54 - 2pc + 1pp. Each firm faces a constant marginal cost of zero. Determine the Bertrand equilibrium prices. What happens to the Bertrand equilibrium prices and profits if increased differentiation causes the demand for Pepsi to become qp = 104 - 2pp + 1pc while the demand for Coke remains unchanged?
4. (10 points) Assume that the demand for Pepsi is Qp 54 - 2Pp + Pc. The demand for Coke is Qc -54-2Pc Pp. Each firm faces a constant marginal cost of zero. a. Determine the Bertrand equilibrium prices. Please show your work. b. What happens to the Bertrand equilibrium prices and profits if the demand for Pepsi becomes Qp 104 -2Pp Pc while the demand for Coke remains unchanged? Discuss your results.
Please for provide step by step solutions
1.Suppose that Pepsi and Coke are competing in a horizontally
differentiated Bertrand market and setting prices.
Coke face marginal cost MCc = 6 and pespsi faces marginal cost
MCp = 4
(a) Write the equation for the demand for coke in terms of price
Pc as a function of Pp and Qc.
(b) Determine the marginal revenue for Coke as a function of Pp
and Qc.
(c) Find the equation tha ttells how...
Carlos and Yifan compete in Cournot competition. Demand in their market is given by P=144-2Q. Carlos has a constant marginal cost of 8; Yifan has a constant marginal cost of 10. This is a one-shot game. Please enter all answers as numbers to two decimal places (e.g. XX.XX). What is the prevailing price in the Nash equilibrium of this game?
Differentiated Bertrand competition versus price leadership. The demand for two brands of laundry detergent, Wave (W) and Rah (R), are given by the following demands: Qw =80–2pW +pR QR =80–2pR +pWThe firms have identical cost functions, with a constant marginal cost of 10. The firms compete in prices. (a) What is the best response function for each firm? (that is, what is firm W's optimal price as a function of firm R’s price, and vice-versa?) What is the equilibrium to...
5. Consider two firms selling differentiated varieties of a product, e.g., Coke and Pepsi. Each firm j chooses a price pj for its own variety. Since these varieties are close substitutes, the demand that each firm faces depends not only on its own price, but also the price of its competitor. Specifically, the demand for j’s variety is given by Dj (pj , p−j ) = max 0, 60 + p−j − 2pj Suppose that both firms can produce any...
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...
6. Price competition in simultaneous move differentiated product duopoly: There are only two gourmet food restaurants in a town. Their menus are not identical, but not totally different either. The price for each entree in a restaurant is the same. The restaurants pick their prices and sell according to their demand. The demand curve faced by restaurant 1 is given by: 100 - 4P + 2p2 and by restaurant 2 is given by: y = 100 - 4p2 + 2p....
91 = Two firms compete in a market by selling differentiated products. The demand equations are given by the following equations: P2 75 – P1 + 75 – P2 + 2. assume that each firm has a marginal cost (and average costs) of 0. a. What market model do we use if each firm competes by simultaneously choosing price? P 92 = b. Are the two goods substitutes? C. Solve for firm 1's best response function. d. Solve for the...
6. Price competition in simultaneous move differentiated product duopoly: There are only two gourmet food restaurants in a town. Their menus are not identical, but not totally different either. The price for each entree in a restaurant is the same. The restaurants pick their prices and sell according to their demand. The demand curve faced by restaurant 1 is given by: = 100 – 4p1 + 2p2 and by restaurant 2 is given by: y= 100 – 4p2 + 2p1....