Two firms figure out that the market inverse demand is P= 81 - Q. Each firm...
Two firms figure out that the market inverse demand is P= 81 - Q. Each firm has the cost C(Q)= Q^2.
1. Find the marginal revenue for the individual firms.
2. What is the reaction function for each firm?
3.What is the equilibrium quantity?
4. What is the market price?
5. How much profit does each firm make?
6. In the long-run what do you expect to happen in a market with profits like this? Find the optimal production for the following duopolists:
7. Find the marginal revenue, marginal cost, and optimal production in a duopoly market with inverse demand,
P= 36 - 3Q, and production costs, C(q1)= 3q^2 and C(q2)=6 * q^2.
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Two firms figure out that the market inverse demand is P= 81 -
Q. Each firm...
Two identical firms compete as a Cournot duopoly. The inverse market demand they face is P...
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4. (12 MARKS -6 FOR EACH PART) Two firms produce homogeneous products and compete as Cournot...
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Two duopoly firms each have a cost function: TC(Q) 60Q Market Inverse Demand is: Pp (Q)824 0.6Q After the duopolists meet secretly and agree to evenly split the profit-maximizing output, Firm 1 decides to break the monopoly-splitting agreement and change its output to maximize its own profit. What will be the net loss of profit for the two firms to the nearest dollar?
Two duopoly firms each have a cost function: TC(Q) 60Q Market Inverse Demand is: Pp (Q)824 0.6Q...
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4. (12 MARKS -6 FOR EACH PART) Two firms produce homogeneous products and compete as Cournot duopolists. Inverse market demand is given by P 30 Q. Firm 1 has a marginal cost of 5 per unit. Firm 2's marginal cost is c2<5. (a) Suppose that c2 falls. What will happen to the Cournot equilibriumi) price, (ii) consumer surplus and total surplus, and (ii) the HHI? Explain your answer. (b) How does this example relate to criticisms of the use of...
EC202-5-FY 10 9Answer both parts of this question. (a) Firm A and Firm B produce a homogenous good and are Cournot duopolists. The firms face an inverse market demand curve given by P 10-Q. where P is the market price and Q is the market quantity demanded. The marginal and average cost of each firm is 4 i. 10 marks] Show that if the firms compete as Cournot duopolists that the total in- dustry output is 4 and that if...
Two duopoly firms each have a cost function: TC(Q) 60Q Market Inverse Demand is: Pp (Q)824 0.6Q After the duopolists meet secretly and agree to evenly split the profit-maximizing output, Firm 1 decides to break the monopoly-splitting agreement and change its output to maximize its own profit. What will be the net loss of profit for the two firms to the nearest dollar?
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Two duopoly firms each have a cost function: TC (Q)...
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