Homework Answers
Q4. False. In Cournot dupoly if one of the firm is producing half of the output, then it is rational for the other firm to produce more than half of the quantity.
Q5. Option F
Total revenue - total cost = 240-280=-40
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Question Completion Status: QUESTION 4 In a Cournot duopoly market, the two firms agree to produce...
Question 5 Demand in a market dominated by two firms (a Cournot duopoly) is determined according...
Question 5 Demand in a market dominated by two firms (a Cournot duopoly) is determined according to: P = 200 – 2(Q1 + Q2), where P is the market price, Q1 is the quantity demanded by Firm 1, and Q2 is the quantity demanded by Firm 2. The marginal cost and average cost for each firm is constant; AC=MC = $60. The cournot-duopoly equilibrium profit for each firm is _____. Hint: Write your answer to two decimal places. QUESTION 6...
Demand in a market dominated by two firms (a Cournot duopoly) is determined according to: P...
Demand in a market dominated by two firms (a Cournot duopoly) is determined according to: P = 300 – 4(Q1 + Q2), where P is the market price, Q1 is the quantity demanded by Firm 1, and Q2 is the quantity demanded by Firm 2. The marginal cost and average cost for each firm is constant; AC=MC = $74. The cournot-duopoly equilibrium profit for each firm is
5. Cournot Competition Consider a Coumot duopoly model. Suppose that market demand is P-a-qi Also suppose that the cost functions of the two firms are TG (q) = q, and T( (a) Write the profit func...
5. Cournot Competition Consider a Coumot duopoly model. Suppose that market demand is P-a-qi Also suppose that the cost functions of the two firms are TG (q) = q, and T( (a) Write the profit function, and the first order condition. (b) Find out the profit maximizing output for each firm. (c) Find the pofit earned by each firm, total profit eamed by the two fims to (d) Now assume that the two firms collude and act as a monopoly....
2. (Cournot Model) Consider a Cournot duopoly. The market demand is p=160 - q2. Firm 1's...
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...
Two duopoly firms each have a cost function: TC(Q) 60Q Market Inverse Demand is: Pp (Q)824 0.6Q After the duopolist...
Two duopoly firms each have a cost function: TC(Q) 60Q Market Inverse Demand is: Pp (Q)824 0.6Q After the duopolists meet secretly and agree to evenly split the profit-maximizing output, Firm 1 decides to break the monopoly-splitting agreement and change its output to maximize its own profit. What will be the net loss of profit for the two firms to the nearest dollar?
Two duopoly firms each have a cost function: TC(Q) 60Q Market Inverse Demand is: Pp (Q)824 0.6Q...
Question 16: In a Cournot market, use the Best Response Functions for firms one and two...
Question 16: In a Cournot market, use the Best Response Functions for firms one and two to explain why collusion (i.e., the market output being equal to the monopoly level) is so hard to maintain.
can someone help me solve/explain step by step 3) Suppose that there are only two firms in the industry for printers, HP and Xerox, making the industry a Cournot duopoly. The demand for printers is g...
can someone help me solve/explain step by step
3) Suppose that there are only two firms in the industry for printers, HP and Xerox, making the industry a Cournot duopoly. The demand for printers is given by the equation, P = 300-4Q1-402, where P is the market price, Q1 is the quantity demanded from HP, and Q2 is the quantity demanded from Xerox. The marginal cost for each firm is constant at $60. a) Derive the equation for HP's revenue....
4. (12 MARKS -6 FOR EACH PART) Two firms produce homogeneous products and compete as Cournot...
4. (12 MARKS -6 FOR EACH PART) Two firms produce homogeneous products and compete as Cournot duopolists. Inverse market demand is given by P 30 Q. Firm 1 has a marginal cost of 5 per unit. Firm 2's marginal cost is c2<5. (a) Suppose that c2 falls. What will happen to the Cournot equilibriumi) price, (ii) consumer surplus and total surplus, and (ii) the HHI? Explain your answer. (b) How does this example relate to criticisms of the use of...
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...
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...
2. There are two firms in a market that produce an identical good, both with marginal...
2. There are two firms in a market that produce an identical good, both with marginal cost MC=10. Fixed costs are zero for both firms. Suppose inverse demand for a product is P= 130 – e a) If the firms set the monopoly price and split the monopoly quantity. What quantities do they choose and what profit do they receive? b) Suppose they set quantities simultaneously. That is, suppose the firms play a Cournot game. What quantities do they choose...
5. Cournot Competition Consider a Coumot duopoly model. Suppose that market demand is P-a-qi Also suppose that the cost functions of the two firms are TG (q) = q, and T( (a) Write the profit function, and the first order condition. (b) Find out the profit maximizing output for each firm. (c) Find the pofit earned by each firm, total profit eamed by the two fims to (d) Now assume that the two firms collude and act as a monopoly....
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...
Two duopoly firms each have a cost function: TC(Q) 60Q Market Inverse Demand is: Pp (Q)824 0.6Q After the duopolists meet secretly and agree to evenly split the profit-maximizing output, Firm 1 decides to break the monopoly-splitting agreement and change its output to maximize its own profit. What will be the net loss of profit for the two firms to the nearest dollar?
Two duopoly firms each have a cost function: TC(Q) 60Q Market Inverse Demand is: Pp (Q)824 0.6Q...
Question 16: In a Cournot market, use the Best Response Functions for firms one and two to explain why collusion (i.e., the market output being equal to the monopoly level) is so hard to maintain.
can someone help me solve/explain step by step
3) Suppose that there are only two firms in the industry for printers, HP and Xerox, making the industry a Cournot duopoly. The demand for printers is given by the equation, P = 300-4Q1-402, where P is the market price, Q1 is the quantity demanded from HP, and Q2 is the quantity demanded from Xerox. The marginal cost for each firm is constant at $60. a) Derive the equation for HP's revenue....
4. (12 MARKS -6 FOR EACH PART) Two firms produce homogeneous products and compete as Cournot duopolists. Inverse market demand is given by P 30 Q. Firm 1 has a marginal cost of 5 per unit. Firm 2's marginal cost is c2<5. (a) Suppose that c2 falls. What will happen to the Cournot equilibriumi) price, (ii) consumer surplus and total surplus, and (ii) the HHI? Explain your answer. (b) How does this example relate to criticisms of the use of...
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...
2. There are two firms in a market that produce an identical good, both with marginal cost MC=10. Fixed costs are zero for both firms. Suppose inverse demand for a product is P= 130 – e a) If the firms set the monopoly price and split the monopoly quantity. What quantities do they choose and what profit do they receive? b) Suppose they set quantities simultaneously. That is, suppose the firms play a Cournot game. What quantities do they choose...
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