Suppose that the (inverse) market demand function for wax paper is P=400-2Q where Q is total...
Suppose that the (inverse) market demand function for wax paper is P=400-2Q where Q is total industry output. There are only two firms, Firm1 and Firm 2, that produce wax paper. Thus, Q=q1+q2. Each firm has no fixed cost but a constant marginal cost of production equals $40.
(a) Suppose that the two firms decide to form a cartel. Calculate the output quantity for Firm 1
(b) Suppose that the two firms decide to form a cartel. Calculate the profit for Firm 1
(c) Suppose Firm 1 decides to cheat while Firm 2 still chooses her output in (b). Find the profit of Firm 1
(d) From (c), calculate the profit of Firm 2
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Suppose that the (inverse) market demand function for wax paper
is P=400-2Q where Q is total...
Consider an (inverse) demand curve P = 30 - Q. And a total cost curve of...
Consider an (inverse) demand curve P = 30 - Q. And a total cost curve of C(Q) = 12Q. (a) Assume a monopolist is operating in this market. (i) Calculate the quantity (qM) chosen by a profit-maximizing monopolist. (ii) At the profit-maximizing quantity, what is the monopolistic market price (pM) of the product. (iii) Calculate the dead-weight loss (allocative inefficiency) associated with this monopoly market. Assume the market for this product is perfectly competitive. (i) Calculate the market-clearing output (qPC)...
41.4 A market has an inverse demand func- tion p = 100 – 2Q and four...
41.4 A market has an inverse demand func- tion p = 100 – 2Q and four firms, each of which has a constant marginal cost of MC = 20. If the firms form a profit-maxi- mizing cartel and agree to operate subject to the constraint that each firm will produce the same output level, how much does each firm produce?
. Consider a market with four firms in a cartel agreement which explicitly colludes to set a price by collectively restricting market output. The inverse market demand is P-1000-5 Q, and each fir...
. Consider a market with four firms in a cartel agreement which explicitly colludes to set a price by collectively restricting market output. The inverse market demand is P-1000-5 Q, and each firm has total costs of C(Q)-7000 +40 Q. (27 points) a) Determine the equilibrium price and quantity in the market. b) Calculate the output each individual firm will produce. c) Calculate the profits each firm will earn. Suppose one firm decides to unilaterally increase output by ten while...
Two identical firms compete as a Cournot duopoly. The inverse market demand they face is P...
Two identical firms compete as a Cournot duopoly. The inverse market demand they face is P = 120-2Q. The total cost function for each firm is TC1(Q) = 4Q1. The total cost function for firm 2 is TC2(Q) = 2Q2. What is the output of each firm? Find: Q1 = ? Q2 = ?
Consider a market with a demand curve given (in inverse form) by P(Q) = 80 – 0.25Q
Part 1 Consider a market with a demand curve given (in inverse form) by P(Q) = 80 – 0.25Q, where Q is total market output and P is the price of the good. Two firms compete in this market by simultaneously choosing quantities q1 and q2 (where q1 + q2 = Q). This is an example of Choose one: A. Stackelberg competition. B. Cournot competition. C. Bertrand competition. D. perfect competition.Part 2 Now suppose the cost of production is constant at $50.00 per unit (and is the same...
Suppose that the inverse market demand for a commodity is given by P = 240 Q...
Suppose that the inverse market demand for a commodity is given by P = 240 Q The cost curves of the three firms which could serve this market are TC,(a) 30q +300 and TC2() (d) Suppose that firms engage in Stackelberg rather than Cournot competition. Firm 1 moves first by choosin its output level. After Firm 1 has chosen its output level, Firm 2 observes ql and chooses its output leve Find the subgame-perfect Nash equilibrium of the Stackelberg game....
Consider a market with demand function D(p)=10-p and firms with constant marginal cost MC=1. Assume that...
Consider a market with demand function D(p)=10-p and firms with
constant marginal cost MC=1. Assume that there is no fixed cost and
thus C(q1)=q1and C(q2)=q2
2. Suppose the owners of the two firms meet together secretly and agree to form a cartel. They choose a total level of production that maximizes their joint profits. They agree to split production and thus profits) equally (a) Suppose that both firms abide by their secret agreement. How much will each firm produce? What...
consider two (2) profit- maximizing firms that behave as quantity setters and supply a homogenous product....
consider two (2) profit- maximizing firms that behave as quantity setters and supply a homogenous product. market demand is P=20-Q. Total cost of each firm are C(q1) =1/2q1^2 a) calculate the equilibrium quantities and profit of each firm b) now suppose that two firms play a repeated game and decides to form a cartel. they make a cartel agreement that their joint profits , and involve each of them setting the same quantity in each period .calculate the cartel quantity...
Suppose that a monopoly faces inverse market demand function as P = 70−2Q, and its marginal...
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3. Two firms that are engaged in Stackelberg competition face the market inverse demand curve P-100-2Q,...
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41.4 A market has an inverse demand func- tion p = 100 – 2Q and four firms, each of which has a constant marginal cost of MC = 20. If the firms form a profit-maxi- mizing cartel and agree to operate subject to the constraint that each firm will produce the same output level, how much does each firm produce?
. Consider a market with four firms in a cartel agreement which explicitly colludes to set a price by collectively restricting market output. The inverse market demand is P-1000-5 Q, and each firm has total costs of C(Q)-7000 +40 Q. (27 points) a) Determine the equilibrium price and quantity in the market. b) Calculate the output each individual firm will produce. c) Calculate the profits each firm will earn. Suppose one firm decides to unilaterally increase output by ten while...
Suppose that the inverse market demand for a commodity is given by P = 240 Q The cost curves of the three firms which could serve this market are TC,(a) 30q +300 and TC2() (d) Suppose that firms engage in Stackelberg rather than Cournot competition. Firm 1 moves first by choosin its output level. After Firm 1 has chosen its output level, Firm 2 observes ql and chooses its output leve Find the subgame-perfect Nash equilibrium of the Stackelberg game....
Consider a market with demand function D(p)=10-p and firms with
constant marginal cost MC=1. Assume that there is no fixed cost and
thus C(q1)=q1and C(q2)=q2
2. Suppose the owners of the two firms meet together secretly and agree to form a cartel. They choose a total level of production that maximizes their joint profits. They agree to split production and thus profits) equally (a) Suppose that both firms abide by their secret agreement. How much will each firm produce? What...
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