Homework Answers
Stackleberg competition occurs when first firm makes the move and has first mover advantage and subsequently second firm makes move depending on what output first firm produces and thus second firm has to follow the suit creating first firm to become industry leader or stackleberg leader assuming both producing identucal goods.
Thus residual demand curve is derived from formula = Market demand curve - supply of rival firm.
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Question 18: In a Stackelberg market, how does the lead firm generate its residual demand curve?
How does the demand curve faced by the firm in a purely competitive market differ from...
How does the demand curve faced by the firm in a purely competitive market differ from the demand curve faced by a firm participating in a monopolistically competitive market? How might that impact the price of the product in the the marketplace and the quantity the firm produces?
What explains the horizontal demand curve for a Firm in a perfectly competitive market? How does...
What explains the horizontal demand curve for a Firm in a perfectly competitive market? How does this differ from the Market demand curve in a perfectly competitive market? Explain the behavior of marginal revenue in a Market compared to a Firm.
Fill in the Blanks Stackelberg Leader-Follower duopolists face a market demand curve given by P =...
Fill in the Blanks Stackelberg Leader-Follower duopolists face a market demand curve given by P = 90 - Q where Q is total market demand. Each firm can produce output at a constant marginal cost of 30 per unit. The equilibrium price or the total market is and equilibrium quantity is
Consider a market with Stackelberg competition. The inverse demand curve is P = a−b Q, with...
Consider a market with Stackelberg competition. The inverse demand curve is P = a−b Q, with a=13 and b=3. Firm 1 is the leader and produces at constant marginal costs equal to zero. Firm 2 is the follower and has the cost function: C(q) = cq^2, with c=5. (Note the square on q). What is the equilibrium quantity of firm 1?
The market demand curve is given by Q = 200-2p. There is one dominant firm, which sets the market...
The market demand curve is given by Q = 200-2p. There is one dominant firm, which sets the market price and has a constant marginal cost of 5, and a competitive fringe of 10 price-taking firms, each of which has a marginal cost function MC (Q) = 10 +Q. Derive the equation of the dominant firm’s residual demand curve. What price will the dominant firm set to maximize its profits? At this price, how much does the competitive fringe produce?
Consider two Stackelberg firms, Firm Alpha and Firm Omega, each with marginal costs of 50 and...
Consider two Stackelberg firms, Firm Alpha and Firm Omega, each with marginal costs of 50 and each facing the market inverse demand curve: P=500-1/2Q Firm Alpha moves first, Firm Omega moves second. How many MORE units does Firm Alpha produce than Firm Omega due to first mover advantage?
3. Two firms that are engaged in Stackelberg competition face the market inverse demand curve P-100-2Q,...
3. Two firms that are engaged in Stackelberg competition face the market inverse demand curve P-100-2Q, where Q is the total 22-0.Sqy, what is Firm 1's (the first-mover's) nverse demand une output, q2. Each firm produces the product at a constant marginal cost of $22. If Firm 2's reaction function is P 56-4 OP=100-2(92-22 + 0.050;) OP=88-1.541 P 88-24
How does a change in consumers' tastes lead to a movement along the demand curve or...
How does a change in consumers' tastes lead to a movement along the demand curve or a shift in the demand curve?
3. How does the demand curve for monopolist firm differ from the demand curves for firms...
3. How does the demand curve for monopolist firm differ from the demand curves for firms in competitive market structures? Show it by graphs.
Two firms are participating in a Stackelberg duopoly. The demand function in the market is given...
Two firms are participating in a Stackelberg duopoly. The demand function in the market is given by Q = 2000 − 2P. Firm 1’s total cost is given by C1(q1) = (q1) 2 and Firm 2’s total cost is given by C2(q2) = 100q2. Firm 1 is the leader and Firm 2 is the follower. (1) Write down the inverse demand function and the maximization problem for Firm 1 given that Firm 2 is expected to produce R2(q1). (2) Compute...
Fill in the Blanks Stackelberg Leader-Follower duopolists face a market demand curve given by P = 90 - Q where Q is total market demand. Each firm can produce output at a constant marginal cost of 30 per unit. The equilibrium price or the total market is and equilibrium quantity is
3. Two firms that are engaged in Stackelberg competition face the market inverse demand curve P-100-2Q, where Q is the total 22-0.Sqy, what is Firm 1's (the first-mover's) nverse demand une output, q2. Each firm produces the product at a constant marginal cost of $22. If Firm 2's reaction function is P 56-4 OP=100-2(92-22 + 0.050;) OP=88-1.541 P 88-24
3. How does the demand curve for monopolist firm differ from the demand curves for firms in competitive market structures? Show it by graphs.
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