Homework Answers
Firm B's profit = [10 - (qA+ qB)] qB- 2 - qB
Maximize with respect to its own output to get the Best response function of Firm B:
qB= 4.5 - qA/2.
substituting into demand and maximizes its profit For Firm A
Profit = [10 - qA- (4.5 - qA/2)] qA - 2 - qA.
Maximizing with respect to qA
We get qA = 4.5
Firm B produces qB= 2.25
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3. Suppose the demand for pizza in a small isolated town is p-10-Q. There are only...
7) Suppose the demand for pizza in a small isolated town is p = 10 -...
7) Suppose the demand for pizza in a small isolated town is p = 10 - Q. There are only two firms, A and B, and each has a cost function TC = 2 + q. Determine the Cournot equilibrium.
Solve step by step please 5. Suppose the demand for pizza in a small isolated town...
Solve step by step please
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Market demand curve for a good produced only by two
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(P,Q.4-42,) in Cournot equilibrium. a) Find b) Find (P,Q,q1,92,,,
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Compare your findings with monopoly and competitive equilibria.
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4. The market demand for pizza in a small town is estimated to be P 250...
4. The market demand for pizza in a small town is estimated to be P 250 20 This market is served by two firms: 1 and 2. Firm 1 has costs of TC1 20q1 while firm 2 is more cost efficient, with costs of TC2 10q2 (16 marks total) a. If the two firms set prices and compete à la Bertrand, what is the (4 marks) (2 marks) equilibrium price of pizza? What is the output for each firm? b....
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Solve step by step please
5. Suppose the demand for pizza in a small isolated town is p- 10 -Q. There are only two firms, A and B, and each has a cost function TC-2 q. Determine the Cournot equilibrium. 6. Consider a market with just one firm. The demand in the market is p a linear cost function C(Q) = 2 18-Q and the firm has a. How much output will this firm produce. What will be the profit...
please explain all details.
Market demand curve for a good produced only by two
firms is given by P= 70- 20. Both firms produce with constant and
identical marginal cost of 3. 10, that is MC, = MC, = 10.
(P,Q.4-42,) in Cournot equilibrium. a) Find b) Find (P,Q,q1,92,,,
2) in Stackelberg equilibrium with Firm 1 acting as the leader. c)
Compare your findings with monopoly and competitive equilibria.
Market demand curve for a good produced only by two firms...
Q.2 Two firms produce homogeneous products. The inverse demand function is: p(x1,x2)-a-x1- x2, where x is the quantity chosen by firm 1, x2 the quantity chosen by firm 2, and a > 0. The cost functions are C1 (x1)-x follower. and C2(x2)- . Firm I is a Stackelberg leader and firm 2 a Stackelberg Q.2.a Find the subgame-perfect quantities. Q.2.b Calculate each firm's equilibrium profit.
4. The market demand for pizza in a small town is estimated to be P 250 20 This market is served by two firms: 1 and 2. Firm 1 has costs of TC1 20q1 while firm 2 is more cost efficient, with costs of TC2 10q2 (16 marks total) a. If the two firms set prices and compete à la Bertrand, what is the (4 marks) (2 marks) equilibrium price of pizza? What is the output for each firm? b....
Please be descriptive.
The market demand curve in a commodity chemical industry is given by Q 600 - 3P, where Q is the quantity demanded per month and P is the market price in dollars. Firms in this industry supply quantities every month, and the resulting market price occurs at the point at which the quantity demanded equals the total quantity supplied. Suppose there are two firms in this industry, Firm 1 and Firm 2. Each firm has an identical...
Suppose that the inverse market demand for a commodity is given by P = 240 Q The cost curves of the three firms which could serve this market are TC,(a) 30q +300 and TC2() (d) Suppose that firms engage in Stackelberg rather than Cournot competition. Firm 1 moves first by choosin its output level. After Firm 1 has chosen its output level, Firm 2 observes ql and chooses its output leve Find the subgame-perfect Nash equilibrium of the Stackelberg game....
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