Question

Consider a version of the Tragedy of the Commons in which herder 1 and 2 simultaneously choose to graze quantities of sheep q

0 0
Add a comment Improve this question Transcribed image text
Answer #1

Herder will try to maximize the profit in best response. Hence first derivative of q1 should be equal to zero at best response.

Hence 0=d/dq1 (80q1-q1/2-q2/2)

Or, 0= 80-q1-q2/2

Or, q1= 80- q2/2

hence option d is correct

Add a comment
Know the answer?
Add Answer to:
Consider a version of the Tragedy of the Commons in which herder 1 and 2 simultaneously...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • 1. Consider the following asymmetric version of the Cournot duopoly model. Two firms compete by simultaneously...

    1. Consider the following asymmetric version of the Cournot duopoly model. Two firms compete by simultaneously choosing the quantities (q, and q2) they produce. Their products are homogeneous, and market demand is given by p- 260-2Q, where Q-q +q2. Firm 1 has a cost advantage; Firm 1 produces at zero cost, while Firm 2 produces at a constant average cost of 40. (The difference in costs is what makes this an asymmetric game.) a. Derive both firms' profit functions, as...

  • 2. Cournot competition: P1 and P2 (independently and simultaneously) choose quantities, qi and q2. The cost...

    2. Cournot competition: P1 and P2 (independently and simultaneously) choose quantities, qi and q2. The cost of producing q units is c(ai)i and the demand curve is given by P(O) 10 Q: (i.e., if P1 produces qi and P2 produces q2; each sells all his units at price 10 1 92 (a) Find all NE. b) Now suppose that the game is played twice. Each firm chooses both a production quantity, and, firm 2 can choose to donate some of...

  • 5. Consider a version of the Cournot duopoly game, which will be thoroughly analyzed in Chapter...

    5. Consider a version of the Cournot duopoly game, which will be thoroughly analyzed in Chapter 10. Two firms (1 and 2) compete in a homogeneous goods market, where the firms produce exactly the same good. The firms simultaneously and independently select quantities to produce. The quantity selected by firm i is denoted q, and must be greater than or equal to zero, for i - 1,2. The market price is given by p-2 - q1 -q2. For simplicity, as...

  • PROBLEM #1 Consider a market with two firms that sell products that are identical. Su market dema...

    PROBLEM #1 Consider a market with two firms that sell products that are identical. Su market demand is as follows: P-56-Q , where Q measures the total output produced by both firms (that is, Q=q +q.) and qi and q, are the quantities produced by firm 1 and firm 2, respectively. The per-unit cost of production is $6 for each firm, and so the firm's cost functions are 6q, and 6q, respectively. Each firm seeks to maximize profits. The firms...

  • 2. (30 pts) There are two firms in a market, producing the same good. The firms...

    2. (30 pts) There are two firms in a market, producing the same good. The firms simultaneously choose their output levels, qı for firm 1 and q2 for firm 2. The price adjusts according to the inverse demand function p= 65 – (91 +92). Each firm has a per-unit (average) cost of 5. Each firm's payoff is its profit. a. (5 pts) Find firm l's profit as a function of qı and q2 (profit equals revenue minus total cost). b....

  • 3. There are two firms that compete according to Cournot competition. Firm 1 has a cost...

    3. There are two firms that compete according to Cournot competition. Firm 1 has a cost function G(91) = 5.59+12. Firm 2 has a cost function C(q2) = 2.5q3 + 18. These firms cannot discriminate, so there is just one price that is determined by the aggregate demand. The inverse demand equation is P(Q) = 600 – 0 Where total supply Q-q1+92. (e) Use your best response equations to mathematically solve for the equilibrium quantities qi 9, Q". equilibrium price...

  • 2*. Consider a market with two firms where the inverse demand function is given by p...

    2*. Consider a market with two firms where the inverse demand function is given by p = 28 - 2q and where q = q1 + q2. Each firm has the total cost function c(qi) = 4qi, where i = {1,2}. a) Compare price level, quantities and profits in this market calculating the Cournot equilibrium and the Stackelberg equilibrium. Draw a graph with best response functions and illustrate the Cournot and Stackelberg solutions in that graph. b) Compare your solutions...

  • 2*. Consider a market with two firms where the inverse demand function is given by p...

    2*. Consider a market with two firms where the inverse demand function is given by p = 28 - 2q and where q = q1 + q2. Each firm has the total cost function c(qi) = 4qi, where i = {1,2}. a) Compare price level, quantities and profits in this market calculating the Cournot equilibrium and the Stackelberg equilibrium. Draw a graph with best response functions and illustrate the Cournot and Stackelberg solutions in that graph. b) Compare your solutions...

  • 2*. Consider a market with two firms where the inverse demand function is given by p...

    2*. Consider a market with two firms where the inverse demand function is given by p = 28 - 2q and where q = q1 + q2. Each firm has the total cost function c(qi) = 4qi, where i = {1,2}. a) Compare price level, quantities and profits in this market calculating the Cournot equilibrium and the Stackelberg equilibrium. Draw a graph with best response functions and illustrate the Cournot and Stackelberg solutions in that graph. b) Compare your solutions...

  • 4) (20 points) Consider the following two player simultaneous move game which is another version of...

    4) (20 points) Consider the following two player simultaneous move game which is another version of the Battle of the Sexes game. Bob Opera Alice 4,1 Opera Football Football 0,0 1,4 0,0 Suppose Alice plays a p - mix in which she plays Opera with probability p and Football with probability (1 – p) and Bob plays a q- mix in which he plays Opera with probability q and Football with probability (1 – 9). a) Find the mixed strategy...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT