Two firms compete by choosing their outputs in sequence, the follower observing the leader’s output before...
Two firms compete by choosing their outputs in sequence, the follower observing the leader’s output before making its own choice. The market price then adjusts to equate demand with aggregate output. Production is costless, and consumer valuations are uniformly distributed between 0 and 1. (a) How much does each firmrm produce in equilibrium? (b) Why is price lower than if the two firms produced simultaneously (viz. a Cournot duopoly)?
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Two firms compete by choosing their outputs in sequence, the follower observing the leader’s output before...
Which of the following statements is correct? a. The Bertrand model is a game involving two...
Which of the following statements is correct? a. The Bertrand model is a game involving two identical firms, producing identical products at a constant marginal (and average) cost, and, simultaneously, choosing prices. b. The Cournot model is similar to the Bertrand model except that firms are assumed to simultaneously choose quantities rather than prices. c. The Stackelberg model is similar to a duopoly version of the Cournot model except that—rather than simultaneously choosing the quantities of their identical outputs—firms move...
Two firms compete in a Cournot homogenous product duopoly. If Firm 1 increases its output, which...
Two firms compete in a Cournot homogenous product duopoly. If Firm 1 increases its output, which of the following is true? Firm 2 will decrease its output and the market price will decrease. Firm 2 will decrease its output and the market price will increase. Firm 2 will increase its output and the market price will decrease. Firm 2 will increase its output and the market price will increase.
1. Consider the following asymmetric version of the Cournot duopoly model. Two firms compete by simultaneously...
1. Consider the following asymmetric version of the Cournot duopoly model. Two firms compete by simultaneously choosing the quantities (q, and q2) they produce. Their products are homogeneous, and market demand is given by p- 260-2Q, where Q-q +q2. Firm 1 has a cost advantage; Firm 1 produces at zero cost, while Firm 2 produces at a constant average cost of 40. (The difference in costs is what makes this an asymmetric game.) a. Derive both firms' profit functions, as...
Consider a Stackelberg price-leader duopoly. There are two firms: A leader and a follower. Assume marginal...
Consider a Stackelberg price-leader duopoly. There are two firms: A leader and a follower. Assume marginal cost to be zero. The market demand is given as: p = a-bq: Show that: (a) The leaders profit-maximizing output q is the same as a monopolist in this market. But, the leaders profit and the market price are lower compared to monopoly. The followers output is one-half the output of the leader. (b)Leaders output is lower than when two firms behave as Cournot...
1. Two firms compete in a linear city of length 1 unit. Consumers are uniformly located...
1. Two firms compete in a linear city of length 1 unit. Consumers are uniformly located along the city. Consumer i's utility derived from buying firm j's product is given by jj-(-x)2-Pj where j 1,2 indicate the two firms, t is the per unit cost of travelling along the city, is the location of consumer i, x is the location of firm j, and pj is the price of product j. Product one contains some intrinsically superior features and 22,...
4. Consider about a duopoly case: two firms compete by choosing prices for two differentiated goods....
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...
The OUTPUT is already answered BUT STILL NEED PROFITS FOR EACH FIRM. please don’t forget to answer profits for part 1!!! Two firms compete as a duopoly. The demand they face is P 100-3Q. The co...
The OUTPUT is already answered BUT STILL NEED PROFITS FOR EACH
FIRM. please don’t forget to answer profits for part 1!!!
Two firms compete as a duopoly. The demand they face is P 100-3Q. The cost function for each firm is C(Q) = 4Q. Determine output, and profits for each firm in a Cournot oligopoly 2 If firms collude, determine output and profit for each firm. 3. If firm 1 cheats on the collusion in item 2, determine output and...
4. (12 MARKS -6 FOR EACH PART) Two firms produce homogeneous products and compete as Cournot...
4. (12 MARKS -6 FOR EACH PART) Two firms produce homogeneous products and compete as Cournot duopolists. Inverse market demand is given by P 30 Q. Firm 1 has a marginal cost of 5 per unit. Firm 2's marginal cost is c2<5. (a) Suppose that c2 falls. What will happen to the Cournot equilibriumi) price, (ii) consumer surplus and total surplus, and (ii) the HHI? Explain your answer. (b) How does this example relate to criticisms of the use of...
1 (Bertrand Model with sequential move) Consider a Bertrand duopoly model with two firms, Fi and...
1 (Bertrand Model with sequential move) Consider a Bertrand duopoly model with two firms, Fi and Fa selling two varieties of a product. The demand curve for Fi's product is 91 (pi,P2) = 10-Pl + 0.5p2: and the demand for F's product is where p is the price charged by F). Both firms have a constant marginal cost of (a) Write down the profits of F1 and F2 as a function of prices P1 and P2. You have b) Derive...
Microeconomics 4. Consider about a duopoly case: two firms compete by choosing prices for two differentiated...
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,...
1. Consider the following asymmetric version of the Cournot duopoly model. Two firms compete by simultaneously choosing the quantities (q, and q2) they produce. Their products are homogeneous, and market demand is given by p- 260-2Q, where Q-q +q2. Firm 1 has a cost advantage; Firm 1 produces at zero cost, while Firm 2 produces at a constant average cost of 40. (The difference in costs is what makes this an asymmetric game.) a. Derive both firms' profit functions, as...
1. Two firms compete in a linear city of length 1 unit. Consumers are uniformly located along the city. Consumer i's utility derived from buying firm j's product is given by jj-(-x)2-Pj where j 1,2 indicate the two firms, t is the per unit cost of travelling along the city, is the location of consumer i, x is the location of firm j, and pj is the price of product j. Product one contains some intrinsically superior features and 22,...
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...
The OUTPUT is already answered BUT STILL NEED PROFITS FOR EACH
FIRM. please don’t forget to answer profits for part 1!!!
Two firms compete as a duopoly. The demand they face is P 100-3Q. The cost function for each firm is C(Q) = 4Q. Determine output, and profits for each firm in a Cournot oligopoly 2 If firms collude, determine output and profit for each firm. 3. If firm 1 cheats on the collusion in item 2, determine output and...
4. (12 MARKS -6 FOR EACH PART) Two firms produce homogeneous products and compete as Cournot duopolists. Inverse market demand is given by P 30 Q. Firm 1 has a marginal cost of 5 per unit. Firm 2's marginal cost is c2<5. (a) Suppose that c2 falls. What will happen to the Cournot equilibriumi) price, (ii) consumer surplus and total surplus, and (ii) the HHI? Explain your answer. (b) How does this example relate to criticisms of the use of...
1 (Bertrand Model with sequential move) Consider a Bertrand duopoly model with two firms, Fi and Fa selling two varieties of a product. The demand curve for Fi's product is 91 (pi,P2) = 10-Pl + 0.5p2: and the demand for F's product is where p is the price charged by F). Both firms have a constant marginal cost of (a) Write down the profits of F1 and F2 as a function of prices P1 and P2. You have b) Derive...
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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