Question

The inverse market demand curve for bean sprouts is given by
P(Y ) = 100−2Y , and the total cost function for any rm in the industry
is given by TC(y) = 4y.

Suppose the 2 cournot firms operated in the market. What would the reaction function of each firm be?

If the two rms decided to collude, industry output would be ____
and the market price would equal _________

Suppose both of the colluding rms are producing equal amounts of
output. If one of the colluding rms assumes that the other rm would
not react to a change in industry output, what would happen to a rm's
own pro ts if it increased its output by one unit? Profits would
increase by ____
Suppose one rm acts as a Stackleberg leader and the other rm
behaves as a follower. The maximization problem for the leader can be
written as ____________
Solving this problem results in the leader producing an output of
____and the follower producing ____ . This implies an industry
output of____and price of____

Answer 1

РСУ)-100-2-Y

e,48- ons po 12

= aH00-1152-96 : 2400 1248 Price 100-29

co p 2 4s-130o-333 400 1152-51300-4383 . 1152-88a