6. Price competition in simultaneous move differentiated product duopoly: There are only two gourmet food restaurants i...
6. Price competition in simultaneous move differentiated product duopoly: There are only two gourmet food restaurants in a town. Their menus are not identical, but not totally different either. The price for each entree in a restaurant is the same. The restaurants pick their prices and sell according to their demand. The demand curve faced by restaurant 1 is given by: 100 - 4P + 2p2 and by restaurant 2 is given by: y = 100 - 4p2 + 2p....
Duopoly with product differentiation in which the demand and cost functions are q1=88-4p1+2p2 c1=10q1, q2=56+2p1-4p2 c2=8q2 for the firm I and II respectively Derive the price reaction functions for each firm on the assumption that each maximises its profits with respect to its own price. Determine the equilibrium price, quantity and profit for each firm. Kindly elaborate the steps along with the books referred. Thanks
5. Bertrand model: Price competition in simultaneous move homogeneous product duopoly—explain in words. Consider the brick producers again. This time, each firm simultaneously and independently picks the price. Since the product is homogeneous, the consumer buys from the producer offering at a cheaper price. The market demand curve faced by the two firms is P=1 - 50000 (x+y), and costs are C1(x) = 0.02x and C (y) = 0.02y, where firm 1 produces x units and firm 2 produces y...
3. Cournot model: Quantity competition in simultaneous move homogeneous product duopoly explain in words. The market for bricks consists of two firms that produce identical products. Competition in the market is such that each of the firms simultaneously and independently produces a quantity of output, and these quantities are then sold in the market at a price that is determined by the total amount produced by the two firms. Firm 2 has a patented technology that provides it with a...
4. Consider about a duopoly case: two firms compete by choosing prices for two differentiated goods. Their demand functions are Q1 = 20-P1+ P2 and Q2-20 + P1-P2, where Pi and P2 are the prices charged by each firm, respectively, and Qi and Q2 are the resulting demands. Fixed costs and marginal costs are both zero. (a) Suppose the two firms set their prices at the same time. Find the resulting Na equilibrium. What price will each firm charge, how...
Mathematical Question 3 (30pts) 3. Consider two firms are performing Cournot price competition in two differentiated goods markets. Firm 1 produces goods 1, and firm 2 produces goods 2, and two market demand functions are given by 91 (P1,P2) = 12-2p1 + P2 and 921,P2) = 12-2p2 + P 1. Furthermore, assume that the two firms have the same cost function such that fixed cost is $20 and variable cost is zero. a. (10pts) Calculate the equilibrium prices, quantities and...
Microeconomics
4. Consider about a duopoly case: two firms compete by choosing prices for two differentiated goods. Their demand functions are Q1 20-P1 + P2 and Q2 20 +P1-P2, where Pi and P2 are the prices charged by each firm, respectively, and Qi and Q2 are the resulting demands. Fixed costs and marginal costs are both zero. (o) Suppose the two frms set their prices at the same time. Find the resalting Na equilibrium. What price will each firm charge,...
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Budgetary Policy and Economic Growth Errol D'Souza The share of capital expenditures in government expenditures has been slipping and the tax reforms have not yet improved the income...
SYNOPSIS The product manager for coffee development at Kraft Canada must decide whether to introduce the company's new line of single-serve coffee pods or to await results from the product's launch in the United States. Key strategic decisions include choosing the target market to focus on and determining the value proposition to emphasize. Important questions are also raised in regard to how the new product should be branded, the flavors to offer, whether Kraft should use traditional distribution channels or...