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8. Suppose two long-lived firms are engaged on repeated Cournot competition. The firms have a common...
Question 2 (60 points) Consider two following Cournot competition between two firms, Firm 1 and Firm 2. The firms face an inverse demand function P = 600-Q where Q = 91 + 92 is the total output. Each unit produced costs c-$60. Therefore the profit of each farmer is given by π1 (J1.qz) = (600-91-J2)a1-6091 712 (41,42) (600 q1 q2)42-6092 Each firm. i simultaneusly chooses own qi to maximize own profits πί. a) (15 points) Find the Cournot NE quantities...
usion (24 points) Two firms are playing a repeated Bertrand game infinitely, each with the same marginal cost 100. The market demand function is P-400-Q. The firm who charges the lower price wins the whole market. When both firms charge the same price, each gets 1/2 of the total market. I. Coll A. (6 points) What price will they choose in the stage (only one period) Nash equilibrium? What price will they choose if in the stage game (only one...