3. (8 points) Consider a duopoly with a market demand curve given by p- 300 - 3Y (a) (4 points) Suppose that each firm has constant marginal costs MC 100 and fixed costs FC- 50. Derive each firm'...
3. (8 points) Consider a duopoly with a market demand curve given by p- 300 - 3Y (a) (4 points) Suppose that each firm has constant marginal costs MC 100 and fixed costs FC- 50. Derive each firm's reaction function (b) (2 points) Using the same MC and FC values as in part (a), find the equilibrium price and quantities for each firm (e) (2 points) Calculate the total proft of each firm.
A homogeneous products duopoly faces a market demand function given by P a - Q, where QQ Q2 and a>300. Both firms have constant marginal costs MC-100. There are no fixed costs. a) What is firm 1's optimal quantity given that firm 2 produces an output of 50 units per year? And what is firm's 1 quantity if firm 2 produces 20 units? [4 marks] b) Derive the equation of each firm's reaction function and provide a graphical explanation to...
2. (Cournot Model) Consider a Cournot duopoly. The market demand is p=160 - q2. Firm 1's marginal cost is 10, and firm 2's marginal cost is also 10. There are no fixed costs. A. Derive each firm's best response function B. What is the Nash equilibrium of this model? Find the equilibrium market price. C. Find the equilibrium profit for each firm D. Find the equilibrium consumer surplus in this market. 3. (Bertrand Model) Consider a Bertrand duopoly. The market...
Suppose that the market demand curve for mineral water is given as Q-100-10P and marginal cost is fixed at $4. Find the equilibrium price and quantity in each type of different market structure. Show your calculation (2 points for each subquestion). a) Monopoly b) Coumot duopoly c) Stackelberg duopoly d) Bertrand duopoly (MR is fixed at the level of MC). e) Perfect competitive market (MR is fixed at the level of MC)
A homogeneous product duopoly faces a market demand function given by p = 300 - 3Q,where Q = q1 + q2. Both firms have constant marginal cost MC = 100. (part 2) 1a. What is the Bertrand equilibrium price and quantity in this market? 1b. Suppose Firm 1 is the Stackelberg leader, what is the equilibrium price in this market if Firm 2 plays the follower in this duopoly market? What is the equilibrium quantity? How much does each firm...
Suppose that the market demand curve for mineral water is given as ?=100−10? and marginal cost is fixed at $4. Find the equilibrium price and quantity in each type of different market structure. Show your calculation. 1) Monopoly, Cournot duopoly, and Stackelberg duopoly 2)Bertrand duopoly (MR is fixed at the level of MC). 3) Perfect competitive market (MR is fixed at the level of MC).
Suppose that the market demand curve for mineral water is given as ?=100−10? and marginal cost is fixed at $4. Find the equilibrium price and quantity in each type of different market structure. Show your calculation. a) Monopoly, Cournot duopoly, and Stackelberg duopoly b)Bertrand duopoly (MR is fixed at the level of MC). c) Perfect competitive market (MR is fixed at the level of MC).
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...
Suppose that the market demand curve for mineral water is given as Q=100−10P and marginal cost is fixed at $4. Find the equilibrium price and quantity in each type of different market structure. Show your calculation. a) Monopoly b) Cournot duopoly c) Stackelberg duopoly d) Bertrand duopoly (MR is fixed at the level of MC). e) Perfect competitive market (MR is fixed at the level of MC).
Suppose that the market demand curve for mineral water is given as Q=100−10P and marginal cost is fixed at $4. Find the equilibrium price and quantity in each type of different market structure. Show your calculation. A) Bertrand duopoly (MR is fixed at the level of MC). B) Perfect competitive market (MR is fixed at the level of MC).