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oligopolistic market yi. Each firm has the n firms compete each other with their production yi,...
Subject 2: Oligopolistic Competition (35%) Two firms (Natural Salt and Healthy Salt) compete in the market...
Subject 2: Oligopolistic Competition (35%) Two firms (Natural Salt and Healthy Salt) compete in the market for Himalayan table salt. Consumers see the salt produced by both firms as perfect substitutes. In this market, each firm chooses what output to produce and price is determined by aggregate output. Market demand is given by Q 450-2P, where Q is kgs and P is €/kg. The initial marginal cost of Natural Salt is 50/kg. The respective for Healthy Salt is 406/kg. A...
Suppose 2 firms compete in a market for widgets. Each of them produces identical widgets. Each...
Suppose 2 firms compete in a market for widgets. Each of them produces identical widgets. Each firm incurs a cost of $10 per widget produced. The two firms simultaneously (and independently) decide how many widgets to produce. The inverse demand for widgets is given by P=100−3Q, where Q=q1+q2, where q1denotes the output of firm 1 and q2 denotes the output of firm 2. What is firm 1's best response to q2=2? What is firm 1's best response to q2=20? What...
5. Three firms are considering entering a new market. The payoff for each firm that enters...
5. Three firms are considering entering a new market. The payoff for each firm that enters is 150, where n is the number of firms that enter. The cost of entering is 62. Find a symmetric mixed-strategy Nash equilibrium in which all three players enter with the same probability. (15 points)
Problem 5. (20 points) There are two competing firms. Each firm decides when to exit the...
Problem 5. (20 points) There are two competing firms. Each firm decides when to exit the market: (i) immediately, (ii) after 6 months, or (iii) after 1 year. If a firm decides to exit the market, it does not get any payoff from that point on (that is, its utility stays the same). After every 6 months firms gain or lose utilities as follow: if both firms are still in the market, they both lose -1 and if only one...
Subject 2: Oligopolistic Competition (35% Two firms (Natural Salt and Healthy Salt) compete i Consumers see...
Subject 2: Oligopolistic Competition (35% Two firms (Natural Salt and Healthy Salt) compete i Consumers see the salt produced by both firms as perfect substitutes. n the market for Himalayan table salt In this market, each firm chooses what output to produce and price is determined by aggregate output. Market demand is given by Q 450-2P, where Q is kgs ard Pis €/kg. The initial marginal cost of Natural Salt is S0 kg. The respective for Healthy Salt is 40/kg....
Subject 2: Oligopolistic Competition (35% Two firms (Natural Salt and Healthy Salt) compete i Consumers see...
Subject 2: Oligopolistic Competition (35% Two firms (Natural Salt and Healthy Salt) compete i Consumers see the salt produced by both firms as perfect substitutes. n the market for Himalayan table salt In this market, each firm chooses what output to produce and price is determined by aggregate output. Market demand is given by Q 450-2P, where Q is kgs ard Pis €/kg. The initial marginal cost of Natural Salt is S0 kg. The respective for Healthy Salt is 40/kg....
Two profit-maximizing firms compete in a market. Firm 1 chooses quantity qı > 0 and Firm...
Two profit-maximizing firms compete in a market. Firm 1 chooses quantity qı > 0 and Firm 2 chooses quantity 42 > 0. The market price is: p(91,92) = 8 - 2q1 - 42. The cost to Firm 1 of producing qi is C1 = 41. The cost to Firm 2 of producing 92 is C2 = 42 + 42. a.) * Calculate the best-response function for each firm. b.) Suppose the two firms choose their quantities simultaneously. What is the...
Exercise 1. Short-Run Industry Supply Curve In a perfectly competitive market there are n firms with...
Exercise 1. Short-Run Industry Supply Curve In a perfectly competitive market there are n firms with identical technology: yi=Li½Ki½. Each firm’s cost function is Ci=wLi+rKi where w=r=1. a) In the short run all firms have a fixed level of Ki=100, so that yi=10Li½ and Ci=Li+100. What is the cost function Ci(yi)? What is the short-run average cost function ACi(yi)? b) What is each firm’s marginal cost function MCi(yi)? What is each firm’s short-run supply function si(p)? Find the inverse of...
Exercise 5: Two oligopolistic firms compete in the same market as in Exercise 1 where the...
Exercise 5: Two oligopolistic firms compete in the same market as in Exercise 1 where the demand function is 4800 80p. The two firms can expand their output at a constant marginal and average cost of 305 (1) Fill the second column of table 1 with the values for the market price corresponding to each value of the overall quantity produced in the market. (2) Draw in diagram 1 the marginal cost, the market demand and the marginal revenue at...
2. Suppose there are 2 firms in a market. They face an aggregate demand curve, P=400-.75Q....
2. Suppose there are 2 firms in a market. They face an aggregate demand curve, P=400-.75Q. Each firm has a Cost Function, TC=750+4q (MC=4). b. Suppose instead that the firms compete in Quantity (Cournot Competition). Calculate each firm's best-response function using the formulae provided in the book. What is the Nash equilibrium level of production for each firm? What is the equilibrium price? What are the profits of each firm? Provide a graph illustrating your answer.
Subject 2: Oligopolistic Competition (35%) Two firms (Natural Salt and Healthy Salt) compete in the market for Himalayan table salt. Consumers see the salt produced by both firms as perfect substitutes. In this market, each firm chooses what output to produce and price is determined by aggregate output. Market demand is given by Q 450-2P, where Q is kgs and P is €/kg. The initial marginal cost of Natural Salt is 50/kg. The respective for Healthy Salt is 406/kg. A...
5. Three firms are considering entering a new market. The payoff for each firm that enters is 150, where n is the number of firms that enter. The cost of entering is 62. Find a symmetric mixed-strategy Nash equilibrium in which all three players enter with the same probability. (15 points)
Problem 5. (20 points) There are two competing firms. Each firm decides when to exit the market: (i) immediately, (ii) after 6 months, or (iii) after 1 year. If a firm decides to exit the market, it does not get any payoff from that point on (that is, its utility stays the same). After every 6 months firms gain or lose utilities as follow: if both firms are still in the market, they both lose -1 and if only one...
Subject 2: Oligopolistic Competition (35% Two firms (Natural Salt and Healthy Salt) compete i Consumers see the salt produced by both firms as perfect substitutes. n the market for Himalayan table salt In this market, each firm chooses what output to produce and price is determined by aggregate output. Market demand is given by Q 450-2P, where Q is kgs ard Pis €/kg. The initial marginal cost of Natural Salt is S0 kg. The respective for Healthy Salt is 40/kg....
Subject 2: Oligopolistic Competition (35% Two firms (Natural Salt and Healthy Salt) compete i Consumers see the salt produced by both firms as perfect substitutes. n the market for Himalayan table salt In this market, each firm chooses what output to produce and price is determined by aggregate output. Market demand is given by Q 450-2P, where Q is kgs ard Pis €/kg. The initial marginal cost of Natural Salt is S0 kg. The respective for Healthy Salt is 40/kg....
Two profit-maximizing firms compete in a market. Firm 1 chooses quantity qı > 0 and Firm 2 chooses quantity 42 > 0. The market price is: p(91,92) = 8 - 2q1 - 42. The cost to Firm 1 of producing qi is C1 = 41. The cost to Firm 2 of producing 92 is C2 = 42 + 42. a.) * Calculate the best-response function for each firm. b.) Suppose the two firms choose their quantities simultaneously. What is the...
Exercise 5: Two oligopolistic firms compete in the same market as in Exercise 1 where the demand function is 4800 80p. The two firms can expand their output at a constant marginal and average cost of 305 (1) Fill the second column of table 1 with the values for the market price corresponding to each value of the overall quantity produced in the market. (2) Draw in diagram 1 the marginal cost, the market demand and the marginal revenue at...
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