Suppose we have spatial oligopoly with 35 total consumers: Firm 1 is located 4 consumers from...
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Suppose we have spatial oligopoly with 35 total consumers:
Firm 1 is located 4 consumers from...
1. Two firms compete in a linear city of length 1 unit. Consumers are uniformly located...
1. Two firms compete in a linear city of length 1 unit. Consumers are uniformly located along the city. Consumer i's utility derived from buying firm j's product is given by jj-(-x)2-Pj where j 1,2 indicate the two firms, t is the per unit cost of travelling along the city, is the location of consumer i, x is the location of firm j, and pj is the price of product j. Product one contains some intrinsically superior features and 22,...
Consumers live uniformly in a "linear-1-mile city". There are two firms, located at r-0 and r...
Consumers live uniformly in a "linear-1-mile city". There are two firms, located at r-0 and r - 1, which each produce the same physical good at marginal cost of c > 0. Consumers have transportation cost t per unit of distance. Firms are competing for customers by selecting their prices pı 2 0 and p2 2 0. It is assumed that each consumer will buy exactly one unit of the product. Firm 1 Consumer at r Firm 2 cost of...
16:29 Back Problem Set 2 ECON 461 Problem Set 2 Summer 2019 Each qustion will receive...
16:29 Back Problem Set 2 ECON 461 Problem Set 2 Summer 2019 Each qustion will receive equal weight in grading 1. Consider a duopoly in which two firms produce difierent varieties of a differentiated product at constant average and marginal cost 4 per unit. Let the equations of the inverse demand curves be P 700- 7 P-200- +9 (both equations valid wheree the implied prices and quantities are nonnega tive) (a) find Nash equilibrium prices, quantities, and payoffs for a...
9 and10 9. Customers are uniformly located along a street with unit length (the left end...
9
and10
9. Customers are uniformly located along a street with unit length (the left end is 0 and the right end is 1). Each of them wants to buy one unit of a good. The transportation cost of customers is c dollars per unit length. Firms have same production cost and the market price is fixed at some level above the production cost. (a) Let there be 4 firms. (i) Find the equilibrium locations of firms (ii) Is the...
Consider a Hotelling line of length 1. A grocery store is located at each endpoint. The...
Consider a Hotelling line of length 1. A grocery store is located at each endpoint. The grocery store at the west end point is owned and operated by Jack Donaghy and offers customers the use of a personal “grocery concierge”, free of charge, who assists the customer in shopping. The grocery store at the east endpoint is owned and operated by Milton Greene and does not offer its customers a grocery concierge. The utility of a consumer at location x...
Consider a main street, which is 1 mile long. There are N people uniformly distributed along...
Consider a main street, which is 1 mile long. There are N people uniformly distributed along the main street. Each customer either buys one unit of product from one of the two firms located at either end of the main street every day or buys nothing. If a customer buys no product, her utility will be zero. Each customer’s reservation utility of consuming this product is $V. Each customer’s there and back transportation cost is $t per mile. Suppose that...
9) In Hotelling's linear city (address model where consumers are uniformly distributed over a line of...
9) In Hotelling's linear city (address model where consumers are uniformly distributed over a line of size 1), suppose there are two firms located at the two opposite ends with constant marginal cost c. Consumers utility is given by V- tx2-p, where is per unit transportation cost, x is consumer's distance to a firm, V is the value of consuming the good and p is the price of the good. If firms compete by choosing prices, what is the Nash...
1. Consider a three firm (n = 3) Cournot oligopoly. The market inverse demand function is p (Q) = 24 Q. Firm 1 has constant average and marginal costs of $12 per unit, while firms 2 and 3 have constan...
1. Consider a three firm (n = 3) Cournot oligopoly. The market inverse demand function is p (Q) = 24 Q. Firm 1 has constant average and marginal costs of $12 per unit, while firms 2 and 3 have constant average and marginal costs of $15 per unit. a)Verify that the following are Nash equilibrium quantities for this market: q1 = 9 / 2 and q2 = q3 = 3 / 2 . b)How much profit does each firm earn...
2) Consider a location model of differentiated products where the set of possible products is the...
2) Consider a location model of differentiated products where the set of possible products is the line segment [0,11 and consumers are uniformly distributed along the line segment. Transportation costs in this model are equal to td, where d= |x- is the distance between the consumer's ideal variety and the variety she purchases. If a consumer with ideal variety x* purchases variety x at price p, then her utility is If the consumer does not purchase the good her utility...
4. Suppose that firm 1 and firm 2 each produce the same product and face a...
4. Suppose that firm 1 and firm 2 each produce the same product and face a market demand curve given by Q = 5000 – 200P. Firm 1 has a unit (marginal) cost of production ci = 6 while firm 2 has a unit cost of c2 = 10. Firms compete by setting prices and consumers in this market will always purchase from the firm with the lower price. In addition, suppose that firms must choose an integer price. This...
1. Two firms compete in a linear city of length 1 unit. Consumers are uniformly located along the city. Consumer i's utility derived from buying firm j's product is given by jj-(-x)2-Pj where j 1,2 indicate the two firms, t is the per unit cost of travelling along the city, is the location of consumer i, x is the location of firm j, and pj is the price of product j. Product one contains some intrinsically superior features and 22,...
Consumers live uniformly in a "linear-1-mile city". There are two firms, located at r-0 and r - 1, which each produce the same physical good at marginal cost of c > 0. Consumers have transportation cost t per unit of distance. Firms are competing for customers by selecting their prices pı 2 0 and p2 2 0. It is assumed that each consumer will buy exactly one unit of the product. Firm 1 Consumer at r Firm 2 cost of...
16:29 Back Problem Set 2 ECON 461 Problem Set 2 Summer 2019 Each qustion will receive equal weight in grading 1. Consider a duopoly in which two firms produce difierent varieties of a differentiated product at constant average and marginal cost 4 per unit. Let the equations of the inverse demand curves be P 700- 7 P-200- +9 (both equations valid wheree the implied prices and quantities are nonnega tive) (a) find Nash equilibrium prices, quantities, and payoffs for a...
9
and10
9. Customers are uniformly located along a street with unit length (the left end is 0 and the right end is 1). Each of them wants to buy one unit of a good. The transportation cost of customers is c dollars per unit length. Firms have same production cost and the market price is fixed at some level above the production cost. (a) Let there be 4 firms. (i) Find the equilibrium locations of firms (ii) Is the...
9) In Hotelling's linear city (address model where consumers are uniformly distributed over a line of size 1), suppose there are two firms located at the two opposite ends with constant marginal cost c. Consumers utility is given by V- tx2-p, where is per unit transportation cost, x is consumer's distance to a firm, V is the value of consuming the good and p is the price of the good. If firms compete by choosing prices, what is the Nash...
2) Consider a location model of differentiated products where the set of possible products is the line segment [0,11 and consumers are uniformly distributed along the line segment. Transportation costs in this model are equal to td, where d= |x- is the distance between the consumer's ideal variety and the variety she purchases. If a consumer with ideal variety x* purchases variety x at price p, then her utility is If the consumer does not purchase the good her utility...
4. Suppose that firm 1 and firm 2 each produce the same product and face a market demand curve given by Q = 5000 – 200P. Firm 1 has a unit (marginal) cost of production ci = 6 while firm 2 has a unit cost of c2 = 10. Firms compete by setting prices and consumers in this market will always purchase from the firm with the lower price. In addition, suppose that firms must choose an integer price. This...
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