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Consider a firm facing market demand qa p with a > 0; its cost of production c0 (a)(2pt] Find the optimal price...
Two firms figure out that the market inverse demand is P= 81 - Q. Each firm has the cost C(Q)= Q^2. 1. Find the marginal revenue for the individual firms. 2. What is the reaction function for each firm? 3.What is the equilibrium quantity? 4. What is the market price? 5. How much profit does each firm make? 6. In the long-run what do you expect to happen in a market with profits like this? Find the optimal production for...
A firm's market demand for its product in the company’s country, a, is given by Qa(Pa) = 1,050 − 4Pa, where Qa is the quantity of products produced per year and Pa is the price product. Cost of producing this product is ?(Q) = 70,125 + 0.0125Q2. This implies a marginal cost of production of ?C(q) = 0.025Q. a) Find the profit-maximizing price and quantity. Compute the firm’s profit in this case. Should the firm shut down in the short...
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)...
Consider two firms (Firm A and Firm B) competing in this market. They simultaneously decide on the price of the product in a typical Bertrand fashion while producing an identical product. Both firms face the same cost function: C(qA) = 12qA and C(qB) = 12qB, where qA is the output of Firm A and qB is the output of Firm B. The demand curve is P = 30 - Q. (i) What will be the Bertrand-Nash equilibrium price (pB) chosen...
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...
Two firms are price-competing as in the standard Bertrand model. Each faces the market demand function D(p)=50-p. Firm 1 has constant marginal cost c1=10 and firm 2 has c2=20. As usual, if one of the firms has the lower price, they capture the entire market, and when they both charge exactly the same price they share the demand equally. 1. Suppose A1=A2={0.00, 0.01, 0.02,...,100.00}. That is, instead of any real number, we force prices to be listed in whole cents....
Suppose two firms compete by selecting quantities q1 and q2, respectively, with the market price given by p = 1000-3q1 -3q2. Firm 1 (the incumbent) is already in the market. Firm 2 (the potential entrant) must decide whether or not to enter and, if she enters, how much to produce. First the incumbent commits to its production level q2. The potential entrant, having seen q1, decides whether to enter the industry. If firm 2 chooses to enter, then it selects...
Duopoly quantity-setting firms face the market demand p=210-Q. Each firm has a marginal cost of $15 per unit. What is the Cournot equilibrium? The Cournot Equilibrium quantities for Firm 1 (q1) and Firm 2 (q2) are: q1= __ units and q2 =__ units . (Enter numeric responses using real numbers rounded to two decimal places.) The Cournot equilibrium price is p=$__ (two decimal places)
Demand in a market dominated by two firms (a Cournot duopoly) is determined according to: P = 300 – 4(Q1 + Q2), where P is the market price, Q1 is the quantity demanded by Firm 1, and Q2 is the quantity demanded by Firm 2. The marginal cost and average cost for each firm is constant; AC=MC = $74. The cournot-duopoly equilibrium profit for each firm is
2. Suppose the market demand curve is P = 40 − 3Q and all firms in the industry face M C = 4 and have no fixed costs. For each of the following situations, calculate the five items: Market Price , Quantity per firm ,Profits per firm ,Consumer Surplus ,Deadweight Loss (a) Uniform pricing monopolist P = Q = π = CS = DWL = (b) Cournot Duopoly P= Q1 = Q2 = π 1 = π2...