All questions below rely on the following assumptions:
? = 20 − .5? ?c= 10 (No fixed costs)
1. Draw a graph with P on the vertical axis and Q on the horizontal axis that shows: (1) the demand curve; (2) the marginal revenue curve; (3) the marginal cost curve; and (4) the values of P and Q for the pure competition outcome.
2. If there is only one firm in this industry, what is the profit-maximizing P and Q?
3. What is the profit maximizing P and Q for the two-firm Cournot oligopoly?
4. What is the Profit for the industry under (1) monopoly; (2) Cournot duopoly; and (3) pure competition?
5. Assume that there is a total of four firms with equal Qs in this Cournot oligopoly. What is the industry output at the profit maximizing equilibrium?
All questions below rely on the following assumptions: ? = 20 − .5? ?c= 10 (No...
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) =...
5. Cournot Competition Consider a Coumot duopoly model. Suppose that market demand is P-a-qi Also suppose that the cost functions of the two firms are TG (q) = q, and T( (a) Write the profit function, and the first order condition. (b) Find out the profit maximizing output for each firm. (c) Find the pofit earned by each firm, total profit eamed by the two fims to (d) Now assume that the two firms collude and act as a monopoly....
Cournot Oligopoly and Number of Firms In a Cournot oligopoly, each firm assumes that its rivals do not change their output based on the output that it produces. Ilustration: A Cournot oligopoly has two firms, YandZ. Yobservesthe market demand curve and the number of units that Z produces. It assumes that Z does notchange its output regardless of the number of units that it (Y) produces, so chooses a production level that maximizes its profits. The general effects of a...
please answer all 10 questions thanks 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 Q = 400 – 4P. a. If the firms practice under the Bertrand model, what will be the Nash equilibrium market price and output level? b. If these two...
can someone help me solve/explain step by step 3) Suppose that there are only two firms in the industry for printers, HP and Xerox, making the industry a Cournot duopoly. The demand for printers is given by the equation, P = 300-4Q1-402, where P is the market price, Q1 is the quantity demanded from HP, and Q2 is the quantity demanded from Xerox. The marginal cost for each firm is constant at $60. a) Derive the equation for HP's revenue....
2. (15 points). The demand function for an oligopolistic market is given by the equation, Q 180-4P, where Q is quantity demanded and P is price. The industry has one dominant firm whose marginal cost function is: MC 12+1Qp, and many small firms, with a total supply function: Qs 20+ P. (a) Derive the demand equation for the dominant oligopoly firm. (b) Determine the dominant oligopoly firm's profit-maximizing out- put and price. (c) Determine the total output of the small...
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...
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...
[Cournot competition with N firms] There are three identical firms in the industry. The inverse demand function is p(Q-1-Q, where Q = q1 +92+93 denotes aggregate output. To facilitate your calculations, assume that the marginal cost for all firms is zero, c 0· 2. (a) Find the best response function for each firm. Interpret b) Compute the Cournot equilibrium. (c) Assume that two of the three firms merge (transforming the industry into a duopoly). Show that the profit of the...
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...