Homework Answers
Answer 8 : Option D is correct.As Government decided to put tax on the per unit than it would not resulted in Equilibrium Quantity to be increased. As Quantity demand has been shifted to one firm from another.
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8. Consider a market where two firms are Cournot competitors with constant average and marginal costs....
Two firms sell identical products and compete as Cournot (price-setting) competitors in a market with a...
Two firms sell identical products and compete as Cournot (price-setting) competitors in a market with a demand of p = 150 - Q. Each firm has a constant marginal and average cost of $3 per unit of output. Find the quantity each firm will produce and the price in equilibrium.
Consider a market with two firms in Cournot (quantity) competition. Market demand is given by q(p)...
Consider a market with two firms in Cournot (quantity) competition. Market demand is given by q(p) = a − p. Each firm faces a constant marginal cost of c. a. (15 points) Suppose that the government imposes a unit tax of δ, so that if a firm sells q units of the good, that firm owes q · δ to the government. Find the equilibrium quantity, price paid by consumers, consumer surplus, and tax revenue. Your answers should be functions...
[12] Two firms, A and B. operate in a market as Cournot competitors. Each has the...
[12] Two firms, A and B. operate in a market as Cournot competitors. Each has the following reaction functions A's reaction function B's reaction function - QA = 200 - 20 Qs = 400 - 20 where QA and Q. denote the production levels of A and B, respectively. Accordingly, we would expect firm A to produce _ and firm B to produce_, which coincides with the Cournot Equilibrium. 80,60 60,280 200.0: None of the above [12] Two firms, A...
1. Two firms, one in Spain and the other in France, act as Cournot competitors in...
1. Two firms, one in Spain and the other in France, act as Cournot competitors in supplying mussels to Belgium. The inverse demand for mussels in Belgium is given by p = 100 − 2Q, where Q is the total quantity supplied. The marginal cost for each firm (including shipping) is 25. (i) Calculate the Cournot equilibrium in Belgium and the profits of the two firms on their exports. (ii) Now the French government agrees to subsidise French mussel producers...
Cournot Problem. Consider a Cournot oligopoly with two identical firms. These firms cach have constant marginal...
Cournot Problem. Consider a Cournot oligopoly with two identical firms. These firms cach have constant marginal costs of $10. The market for these firms, product has demand Q 100-P 27. Refer to Cournot Problem. Each firm will producc. a. 22.5 units b. 30 units. С. 45 units. d. 90 units. ANS: B PTS: 1 28. Refer to Cournot Problem. Total industry output will be units. b. 45 units. С. 60 units. d. 90 units. ANS: C PTS: 1 29. Refer...
Consider a Cournot competition with two firms, A and B. The marginal costs of each firm...
Consider a Cournot competition with two firms, A and B. The marginal costs of each firm is MCA = MCB = 40. The inverse demand function is P = 130 - Q. Find the Nash equilibrium quantities for each firm and the market price.
15.2 where a, b > 0 a. Suppose that firms' marginal and average costs are constant...
15.2 where a, b > 0 a. Suppose that firms' marginal and average costs are constant and equal to c and that inverse market demand is given by P = a - bQ. Calculate the profit-maximizing price-quantity combination for a monopolist. Also calculate the monopolist's profit. b. Calculate the Nash equilibrium quantities for Cournot duopolists, which choose quantities for their identical products simultaneously. Also compute market output, market price, and firm and industry profits. c. Calculate the Nash equilibrium prices...
Cournot: Consider a Cournot duopoly in which firms A and B simultaneously choose quantity. Both firms...
Cournot: Consider a Cournot duopoly in which firms A and B simultaneously choose quantity. Both firms have constant marginal cost of $20 and zero fixed cost. Market demand is given by: P = 140 − qA − qB. (a) Derive the best-response functions for each firm and plot them on the same graph. (b) Calculate the profits of each firm in the Nash Equilibrium outcome.
Consider the constant elasticity Cournot example from class. Two firms are facing market demand D(P) =...
Consider the constant elasticity Cournot example from class. Two firms are facing market demand D(P) = A/P^ε . Firms have constant marginal costs c1 and c2 respectively. Derive the expression for the equilibrium market power m1 of firm 1. If c1 = c2, then how does m1 depend on ε?
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
[12] Two firms, A and B. operate in a market as Cournot competitors. Each has the following reaction functions A's reaction function B's reaction function - QA = 200 - 20 Qs = 400 - 20 where QA and Q. denote the production levels of A and B, respectively. Accordingly, we would expect firm A to produce _ and firm B to produce_, which coincides with the Cournot Equilibrium. 80,60 60,280 200.0: None of the above [12] Two firms, A...
Cournot Problem. Consider a Cournot oligopoly with two identical firms. These firms cach have constant marginal costs of $10. The market for these firms, product has demand Q 100-P 27. Refer to Cournot Problem. Each firm will producc. a. 22.5 units b. 30 units. С. 45 units. d. 90 units. ANS: B PTS: 1 28. Refer to Cournot Problem. Total industry output will be units. b. 45 units. С. 60 units. d. 90 units. ANS: C PTS: 1 29. Refer...
15.2 where a, b > 0 a. Suppose that firms' marginal and average costs are constant and equal to c and that inverse market demand is given by P = a - bQ. Calculate the profit-maximizing price-quantity combination for a monopolist. Also calculate the monopolist's profit. b. Calculate the Nash equilibrium quantities for Cournot duopolists, which choose quantities for their identical products simultaneously. Also compute market output, market price, and firm and industry profits. c. Calculate the Nash equilibrium prices...
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