Homework Answers
Answer:
b. Firm 1 and Firm 2 produce the same amount of output.
Therefore, both the firms
produce same amount of output.
This is happening because both the firms have equal Marginal cost.
In Cournot equilibrium, both the firms produce same amount of output as long as they have same marginal cost.
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16. An industry has two firms. The cost function of Firm 1 is ci(q) 2q + 500, and the cost function of Firm 2 is...
16) . the same results as would exist if a 16) The oligopolistic model in which firms produce exactly called the model B) price monopolist controlled the entire industry is A) collusion Q maximin...
16) . the same results as would exist if a 16) The oligopolistic model in which firms produce exactly called the model B) price monopolist controlled the entire industry is A) collusion Q maximin strategy D) Coumot the output that would be produced if the would be produced if the industry was 17) 17) In the Cournot model the final level of output is industry was a monopoly, and is the output that perfectly competitive. A) equal to; less than...
1.Consider an industry with only two firms that produce identical products. Each of the firms only...
1.Consider an industry with only two firms that produce identical products. Each of the firms only incurs a fixed cost of $1000 to produce and marginal cost is 20. The market demand function is as follows: Q=q1+q2=400-P a. Assuming that the firms form a cartel, calculate the profit-maximizing quantity of output, price and profits b. If the firms choose to behave as in the Cournot model, what would be the profit- maximizing quantities of output, price and profits? c. if...
QUESTION 4 Suppose each firm in an industry is characterized by the cost function C(Q) =...
QUESTION 4 Suppose each firm in an industry is characterized by the cost function C(Q) = 2Q + 500. If the entire industry demand for the product is 657 units. The average per unit cost savings having one firm produce all of the units rather than two firms split production is ____? Hint: Write your answer to two decimal places. 10 points QUESTION 5 In a perfectly competitive market, industry demand is: P = 850 – 3.7Q, and industry...
Consider two firms facing the demand curve P=90-SQ. 17 where Q Q1+02. The firms' cost functions...
Consider two firms facing the demand curve P=90-SQ. 17 where Q Q1+02. The firms' cost functions are С, (A) 10 +sal 13 12 and C2(92)#5+10Q2. Suppose that both firms have entered the industry. What is the joint profit-maximizing level of output? How much will each firm produce? Combined, the firms will produceunits of output, of which Firm 1 will produce units and Firm 2 will produce units. (Enter a numeric response using a real number rounded to two decimal placos.)...
ECON M?C There are two firms in an industry. The industry demand curve is given by...
ECON M?C
There are two firms in an industry. The industry demand curve is given by p = 60 - q. Each firm has one manufacturing plant and each firm i has a cost function C(q) = 97, where qi is the output of firm i. The two firms form a cartel and arrange to split total industry profits equally. Under this cartel arrangement, they will maximize joint profits if Select one: O a. each firm produces 15 units in...
Industry demand is given by : P = 100-2Q The total cost for the individual firm of which there ar...
Industry demand is given by : P = 100-2Q The total cost for the individual firm of which there are 4, is given by: TCi = 10qi + qi2 If the 4 firms form a cartel what will be the price and output if the cartel is centralized and the cartel is decentralized
Joint profit maximizing output and Cournot model Consider two firms facing the demand curve P=75-5C, where...
Joint profit maximizing output and Cournot model
Consider two firms facing the demand curve P=75-5C, where Q Q1 +Q2. The firms' cost functions are Cl (Q1) = 15 +10Q1 and C2 (Q2)-10 + 20Q2. Suppose that both firms have entered the industry. What is the joint profit-maximizing level of output? How much will each firm produce? Combined, the firms will produce units of output, of which Firm 1 will produce units and Firm 2 will produceunits. (Enter a numeric response...
Problem 1: Suppose that the market demand function is given by q-80-2p. All firms in the...
Problem 1: Suppose that the market demand function is given by q-80-2p. All firms in the industry have marginal cost of 10 and no fixed cost. In this problem, the firms compete in quantities. (a) What is the equilibrium price, quantity, consumer surplus, profit (producer surplus) and deadweight loss if there is only one firm in the industry? (b) Now answer the same question if there are two firms in the industry (duopoly). How does your answer compare to the...
Suppose that the (inverse) market demand function for wax paper is P=400-2Q where Q is total...
Suppose that the (inverse) market demand function for wax paper is P=400-2Q where Q is total industry output. There are only two firms, Firm1 and Firm 2, that produce wax paper. Thus, Q=q1+q2. Each firm has no fixed cost but a constant marginal cost of production equals $40. (a) Suppose that the two firms decide to form a cartel. Calculate the output quantity for Firm 1 (b) Suppose that the two firms decide to form a cartel. Calculate the profit...
In the long run, all of the firms in a perfectly competitive industry will: exit the...
In the long run, all of the firms in a perfectly competitive industry will: exit the industry if price is greater than average total cost. produce at an output level at which average total cost equals marginal cost. earn an economic profit greater than zero. O produce an output level at which price is greater than average total cost. Which statement about the differences between monopoly and perfect competition is INCORRECT? A monopoly will charge a higher price and produce...
16) . the same results as would exist if a 16) The oligopolistic model in which firms produce exactly called the model B) price monopolist controlled the entire industry is A) collusion Q maximin strategy D) Coumot the output that would be produced if the would be produced if the industry was 17) 17) In the Cournot model the final level of output is industry was a monopoly, and is the output that perfectly competitive. A) equal to; less than...
Consider two firms facing the demand curve P=90-SQ. 17 where Q Q1+02. The firms' cost functions are С, (A) 10 +sal 13 12 and C2(92)#5+10Q2. Suppose that both firms have entered the industry. What is the joint profit-maximizing level of output? How much will each firm produce? Combined, the firms will produceunits of output, of which Firm 1 will produce units and Firm 2 will produce units. (Enter a numeric response using a real number rounded to two decimal placos.)...
ECON M?C
There are two firms in an industry. The industry demand curve is given by p = 60 - q. Each firm has one manufacturing plant and each firm i has a cost function C(q) = 97, where qi is the output of firm i. The two firms form a cartel and arrange to split total industry profits equally. Under this cartel arrangement, they will maximize joint profits if Select one: O a. each firm produces 15 units in...
Joint profit maximizing output and Cournot model
Consider two firms facing the demand curve P=75-5C, where Q Q1 +Q2. The firms' cost functions are Cl (Q1) = 15 +10Q1 and C2 (Q2)-10 + 20Q2. Suppose that both firms have entered the industry. What is the joint profit-maximizing level of output? How much will each firm produce? Combined, the firms will produce units of output, of which Firm 1 will produce units and Firm 2 will produceunits. (Enter a numeric response...
Problem 1: Suppose that the market demand function is given by q-80-2p. All firms in the industry have marginal cost of 10 and no fixed cost. In this problem, the firms compete in quantities. (a) What is the equilibrium price, quantity, consumer surplus, profit (producer surplus) and deadweight loss if there is only one firm in the industry? (b) Now answer the same question if there are two firms in the industry (duopoly). How does your answer compare to the...
In the long run, all of the firms in a perfectly competitive industry will: exit the industry if price is greater than average total cost. produce at an output level at which average total cost equals marginal cost. earn an economic profit greater than zero. O produce an output level at which price is greater than average total cost. Which statement about the differences between monopoly and perfect competition is INCORRECT? A monopoly will charge a higher price and produce...
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