The demand for soft drink is determined by the following demand function. P = 150 –...
- The demand for soft drink is determined by the following demand function.
P = 150 – Q
MC = 30, FC =0
- Obtain the P and Q of equilibrium and profit if the firm behaves like in perfect competition.
- Obtain the P and Q of equilibrium and profit if the firm behaves like in Monopoly
- No assumes that there are 2 firms (a and b). Obtain qa and qb if they are Cournot oligopolists . Obtain Q and P and the profit of each firm
- Obtain qa and qb if they are Stackelberg Oligopolist. Obtain Q and P and the profit of each firm
- Fill in the following table
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Perfect Competition |
Monopoly |
Cournot |
Stackelberg |
|
|
P |
||||
|
Q |
||||
|
Industry Profits |
||||
|
qa |
||||
|
qb |
||||
|
Profit a |
||||
|
Profit b |
||||
Homework Answers
Add Answer to:
The demand for soft drink is determined by the following demand
function.
P = 150 –...
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...
Reference the following information about the market demand function for questions 1 to 15. These questions...
Reference the following information about the market demand function for questions 1 to 15. These questions are on different types of market structures – monopoly, perfect competition, Cournot oligopoly market, and the Stackelberg oligopoly market. The market demand function is given the following equation: P = 1600 – Q where Q is the industry’s output level. Suppose initially this market is served by a single firm. Let the total cost function of this firm be given the function C(Q) =...
PART TWO (10 points each, 40 points total). Answe r the following problems in the space...
PART TWO (10 points each, 40 points total). Answe r the following problems in the space provided Please show your work in an organized way with clearly labeled graphs if you choose to use any. 11. Two identical firms are engaged in Cournot competition, with cost functions TCA(QA) 150 Qa and TCB(Qs) -150 QB. The market demand is given by P 1050-20. a) Find the Cournot-Nash equilibrium and profit for each firm. b) Find the Stackelberg equilibrium if A leads...
Consider an oligopolistic market with demand represented by P=250-5Q. Assume that the MC for each...
Consider an oligopolistic market with demand represented by P=250-5Q. Assume that the MC for each firm is MC 50. a) If the firms each have the same MC and the market is characterized by price competition (like Bertrand competition), what will be the equilibrium price? Quantity? Industry profits? b) If the few firms are, instead able to perfectly collude, what will be the equilibrium price? Quantity? Industry profits? c) If the market is characterized by quantity competition (Cournot) and there...
please explain all details. Market demand curve for a good produced only by two firms is...
please explain all details.
Market demand curve for a good produced only by two
firms is given by P= 70- 20. Both firms produce with constant and
identical marginal cost of 3. 10, that is MC, = MC, = 10.
(P,Q.4-42,) in Cournot equilibrium. a) Find b) Find (P,Q,q1,92,,,
2) in Stackelberg equilibrium with Firm 1 acting as the leader. c)
Compare your findings with monopoly and competitive equilibria.
Market demand curve for a good produced only by two firms...
The inverse market demand is P=160 – 4Q. The firms have cost functions TC1 = 8+12q1+2q1²...
The inverse market demand is P=160 – 4Q. The firms have cost functions TC1 = 8+12q1+2q1² TC2 = 8+12q2+2q2² a. Determine monopoly profit-maximizing output for each firm. Determine the industry profit-maximizing output under collusion. Calculate the equilibrium price under collusion. Determine if the firms should collude. Assume your initial game is Cournot. Joint profits Profits Collusion = $1079.2 Profits Cournot = 1010.75 Profits Stackelberg = 971.17 Profit monopoly 1 = 904.67 Profits monopoly 2 = 904.67 Collude since...
The market demand function is Q = 10000 - 1000p Each firm has a marginal cost...
The market demand function is Q = 10000 - 1000p Each firm has a marginal cost of m=$0.28. Firm 1, the leader, acts before Firm 2, the follower. Solve for the Stackelberg-Nash equilibrium quantities, prices, and profits. Compare your solution to the Cournot-Nash equilibrium. The Stackelberg-Nash equilibrium quantities are q1 = ____ units and q2= ____ units. (Enter your responses as whole numbers.) The Stackelberg-Nash equilibrium price is: p=$_____________ Profits for the firms are profit1=$_______________ and profit2=$_______________ The Cournot-Nash equilibrium...
1. Suppose there are only two firms in the marker, firm A and firm B. They produce identical products. Firm A and firm B have the same constant marginal cost, MCA MCB ACA ACB 25 The market demand...
1. Suppose there are only two firms in the marker, firm A and firm B. They produce identical products. Firm A and firm B have the same constant marginal cost, MCA MCB ACA ACB 25 The market demand function is given by 0-400 4P. e. Calculate the profits for each firm in the Cournot model. f. g. Is the monopoly outcome stable? If firm A operates under the monopoly outcome, h. Graph the monopoly outcome, cournot outcome and perfect competition...
PART TWO (10 points each, 40 points total). Answe r the following problems in the space provided Please show your work in an organized way with clearly labeled graphs if you choose to use any. 11. Two identical firms are engaged in Cournot competition, with cost functions TCA(QA) 150 Qa and TCB(Qs) -150 QB. The market demand is given by P 1050-20. a) Find the Cournot-Nash equilibrium and profit for each firm. b) Find the Stackelberg equilibrium if A leads...
Consider an oligopolistic market with demand represented by P=250-5Q. Assume that the MC for each firm is MC 50. a) If the firms each have the same MC and the market is characterized by price competition (like Bertrand competition), what will be the equilibrium price? Quantity? Industry profits? b) If the few firms are, instead able to perfectly collude, what will be the equilibrium price? Quantity? Industry profits? c) If the market is characterized by quantity competition (Cournot) and there...
please explain all details.
Market demand curve for a good produced only by two
firms is given by P= 70- 20. Both firms produce with constant and
identical marginal cost of 3. 10, that is MC, = MC, = 10.
(P,Q.4-42,) in Cournot equilibrium. a) Find b) Find (P,Q,q1,92,,,
2) in Stackelberg equilibrium with Firm 1 acting as the leader. c)
Compare your findings with monopoly and competitive equilibria.
Market demand curve for a good produced only by two firms...
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