Answer : Optimal price
P= MC/ (1+1/elasticity ) =$200/(1+1/-2.5) = $200/0.6 =$333
A Cournot oligopoly has four firms in the industry. The market price elasticity of demand is...
A Cournot oligopoly has four firms in the industry. The market price elasticity of demand is -2.5 and the marginal cost of production is $200. What is the profit- maximizing price, rounded to the nearest dollar? $500 $222 $354 More information is needed to answer this question. $208
1. A monopoly’s total cost function is TC = 200 + 8Q + 4Q2. The inverse demand function is P = 400 – 10Q. What will be the monopoly’s profit if it charges a single price to all customers? Group of answer choices a.$2,150 b.$3,420 c.$3,640 d.$2,544 $1,980 2. A Cournot oligopoly has four firms in the industry. The market price elasticity of demand is –2.5 and the marginal cost of production is $200. What is the profit-maximizing price, rounded...
Cournot Oligopoly and Number of Firms In a Cournot oligopoly, each firm assumes that its rivals do not change their output based on the output that it produces. Ilustration: A Cournot oligopoly has two firms, YandZ. Yobservesthe market demand curve and the number of units that Z produces. It assumes that Z does notchange its output regardless of the number of units that it (Y) produces, so chooses a production level that maximizes its profits. The general effects of a...
Firm X produces and sells office furniture. For a particular desk it sells the price it charges is $200, its average total cost is $170, and its marginal cost is $160. Firm Y decides to enter the market and sells a desk that is virtually identical. It decides to charge a price of $150, while its average total cost is $140, and its marginal cost is $130. Is Firm Y engaging in predatory pricing? Yes, Firm Y is using predatory...
A Cournot oligopoly has 2 firms, and inverse market demand P = 60 - Q. All firms have marginal cost 20 . The equilibrium price in this market will be (PLEASE SHOW ME STEP) $20.50 $22 $33.33 $40.15
Exercise: Suppose in a Cournot oligopoly market with n firms, the inverse market demand is p='50 – 0.5Q. Each firm initially produces at a constant MC = 30. a) If a firm invests in R&D that reduces its MC to 20, find the firm's profit from the innovation as a function of number of firms in the market.
Based on the best available econometric estimates, the market elasticity of demand for your firm’s product is -3. The marginal cost of producing the product is constant at $225, while average total cost at current production levels is $315. Determine your optimal per unit price if: Instruction: Enter your responses rounded to two decimal places. a. You are a monopolist. b. You compete against one other firm in a Cournot oligopoly. c. You compete against 19 other firms in a...
An industry consists of two Cournot firms selling a homogeneous product with a market demand curve given by P=100-Q1-Q2. Each firm has a marginal cost of $10 per unit. (a) Find the Cournot equilibrium quantities and prices. (b) What is the Bertrand equilibrium price in this market? (c) Find the quantities and price that would prevail if the firms acted as if they were a monopolist (I.e. find the collusive outcome) and then find the equilibrium price and quantity that...
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....
Consider a homogeneous-product Cournot oligopoly with four firms. Suppose that the inverse demand function is P(Q) = 64 – Q. Suppose that firms incur a constant marginal cost c = 4. Characterize the equilibrium of the game in which all firms simultaneously choose quantity. Suppose that firms 1 and 2 consider merging and that there are synergies leading to marginal costs cm < c. Characterize the new market equilibrium. At what level of cm are the two firms indifferent whether...