Profit will decrease
Note that it is a Nash equilibrium which means that there is no tendency for the firm to initiate a change. If it reduces its output by 1 unit, it will actually increase the market price not only for itself but for the other firm also. Profit of the other firm will increase as a result. For this firm, however, increase in price will occur for all the units produced, but production is reduced which means profit will also decrease for all the units.
Suppose two firms (Firm 1 and Firm 2) are engaged in Cournot competition. Both firms are...
Question 30 1 pts Suppose two forms (Firm 1 and Firm 2) are engaged in duopoly competition Both firms are currently producing equilibrium quantities. If firm 1 were to unilaterally reduce their production by one unit, what would happen to firm 1's profit? Firm 1's profit would decrease Firm 1's profit would increase Firm 1's profit would stay the same There is not enough information to answer this question
Problem 1. Cournot Competition with Two Firms Suppose there are two identical firms engaged in quantity competition (Cournot competition). The demand is P 1 - Qwhere Q qi 2. Assume that firm's i total cost of production is TC(q) = . Compute the Cournot equilibrium (i.e., quantities, price, and profits)
Problem 1. Cournot Competition with Two Firms Suppose there are two identical firms engaged in quantity competition (Cournot competition). The demand is P=1-Q where Q =91 +92. Assume that firm's i total cost of production is TC(qi) Compute the Cournot equilibrium (i.e., quantities, price, and profits).
Problem 2. Cournot Competition with Three Firms Suppose there are three identical firms engaged in quantity competition. The demand is P=1-Q where Q = 91 +92 +93. To simplify, assume that the marginal cost of production is zero. Compute the Cournot equilibrium (i.e., quantities, price, and profits).
Problem 2. Cournot Competition with Three Firms Suppose there are three identical firms engaged in quantity competition. The demand is P = 1 - Q where Q = qi + q2 + q3. To simplify, assume that the marginal cost of production is zero. Compute the Cournot equilibrium (i.e., quantities, price, and profits)
Problem 3. Cournot Competition with Different Costs Suppose there are two firms engaged in quantity competition. The demand is P = 2 - Q where Q =q1+q2. Assume ci = 1 and c2 = , i.e., Firm 2 is more efficient. Compute the Cournot equilibrium (i.e., quantities, price, and profits).
Problem 3. Cournot Competition with Different Costs Suppose there are two firms engaged in quantity competition. The demand is P = 2 - Q where Q=q1 +22. Assume cı = { and c2 = , i.e., Firm 2 is more efficient. Compute the Cournot equilibrium (i.e., quantities, price, and profits). price, and profits).
Problem 4. Cournot Competition With Different Costs Suppose there are two firms engaged in quantity cornpetition. The demand is P = 2-Q where Q qi + 92. Assunie c.-1 and c2 =丨, ie.. Firm 2 is more efficient. Compute the Cournot equilibrium (i.e., quantities, price, and profits)
Consider a Cournot competition with two firms, A and B. The marginal costs of each firm is MCA = MCB = 40. The inverse demand function is P = 130 - Q. Find the Nash equilibrium quantities for each firm and the market price.
Suppose two firms compete in Cournot competition. The market inverse demand curve is ? = 200 − ?1 − ?2. Firm 1 and firm 2 face the same marginal cost curve, ?? = 20. Therefore, profit for firm 1 is ?1 = (200 − ?1 − ?2)?2 − 20?1 and similarly for firm 2. a. Solve for the Cournot price, quantity, and profits. b. Suppose firm 1 is thinking about investing in technology that can reduce its costs to $15...