(4) Assume that the market demand and cost of the Cournot Duopolists are P = 100 -0.5 (q +9₂), C₁=5q, and C₂ = 0.5q22 Find out the output and profit of firms 1 and 2 and industry Price level.
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- Assume that the market demand and the costs of the duopolists are: P=120-0.4(QA + QB) TCA=5QA TCB= 0.2Q2B Also assume that firm B is the sophisticated leader, Determine: a. The reaction curve of A ,the reaction curve of B and the profit function of A b. Stackelberg equilibrium output level for firm A and Stackelberg equilibrium output level for firm B c. The market pricePlease1. Suppose the duopolists producing homogeneous products face the following market demand curve and total cost functions. P=100 -2Q Where Q=4,+92 TC,=10q, And TC,=20q2 Determine the equilibrium quantity, price and profit for each firm assuming firm 1 is the leader and firm 2 is the follower
- country where wine is difficult to grow. The demand for wine is given by p = $480 - .2Q, where p is the price and Q is the total quantity sold. The industry consists of just the two Cournot duopolists, Grinch and Grubb. Imports are prohibited. Grinch has constant marginal costs of $6 and Grubb has marginal costs of $45. How much Grinch's output in equilibrium? | a) 1,350 b) 2,025 c) 337.50 d) 675 e) 1,012.50Help me please3) Assuming both firms behave as Bertrand duopolists, solve for p1 and p2. Show all work. Graph the reaction functions. Demand for firm 1’s product: Q1 = 160 – p1 +(1/2)p2 Demand for firm 2’s product: Q2 = 160 – p2 + (1/2)p1 And TC1 = 20Q1; TC2 = 20Q2
- Suppose that firms’ marginal and average costs are constant and equal to c and that inverse market demand is given by P = a – bQ, where a, b > 0 (a) Calculate the profit-maximizing quantity-price combination and for a monopolist. (b) Calculate the Nash equilibrium quantities for Cournot duopolists, which choose quantities and for their identical products simultaneously. Also compute market output and market price. (c) Calculate the perfectly competitive equilibrium price and market output. (d) Suppose now that there are n identical firms in a Cournot model (oligopoly). Compute the Nash equilibrium quantities as functions of n. Also compute market output and market price. (e) Verify (i) that the monopoly outcome from part (a) can be reproduced in part (d) by setting n = 1; (ii) that the duopoly outcome from part (b) can be reproduced in part (d) by setting n = 2; (iii) that letting n approach infinity yields the same market price and output as…Consider any market that has a demand curve given by: Qd = 240 - 2P. Where Qd is the total quantity demanded in the market, given in millions of units and P is the market price, calculated in monetary units. Imagine that there are 2 Cournot oligopolists operating in this market with Cmg = CVme = 15 and fixed monthly costs equal to 1,400. About this market, ask yourself: a) What is the reaction curve of oligopolists? b) What will be the production of each of the companies? c) What is the selling price practiced by oligopolists? d) What is the profit of each of the oligopolists? e) Imagine that one of the companies managed to implement a process innovation capable of halving its Cmg and CVme, so that they would go from 15 to 7.5. This investment implies an additional monthly expense of $1,800. Discuss the statement: "If this situation occurs, the innovative company will not implement variable cost reduction, as the quantity supplied in the market will increase very little; prices will…Suppose that the market demand for mountain spring water is given as follows: P = 1200 - Q Mountain spring water can be produced at no cost. Determine the level of output produced and price charged by each firm in a Cournot duopoly. A monopolist faces a demand with constant elasticity of -2.0.It has a constant marginal cost of R20 per unit and sets a price to maximise its profit. If marginal cost should increase by 25 percent, would the price charged also rise by 25 percent? Provide a brief explanation.
- (a) Firms A and B are Cournot duopolists producing a homogeneous good. The inverse market demand is given by P= 100 Q, where P is the market price and Q is the total quantity demanded. Each firm has marginal cost equal to 40 and there are no fixed costs. Calculate the total industry output in this market. Derive also (i) the market price, the total profit of the two firms and the consumer surplus. (ii) monopoly. Calculate the total industry output after the merger. Derive also the market price, profit and consumer surplus after the merger. Explain intuitively any changes in these variables if the merger occurs. Suppose the two firms propose to merge to become aPleasePlace the black point (plus symbol) on the following graph to indicate the profit-maximizing price and combined quantity of output if Mays and McCovey choose to work together. 2.00 Demand 1.80 Monopoly Outcome 1.60 1.40 MC = ATC 1.20 1.00 0.80 0.60 0.40 0.20 MR 90 180 270 360 450 540 630 720 810 900 QUANTITY (Cans of beer) PRICE (Dollars per can)
