Suppose two firms compete as Bertrand duopolists for an identical product, where demand is given by Q = 5000 – 50P and both firms have marginal cost of 10 per unit of output. If firm 1 has capacity of 1500 and firm 2 has capacity of 2000, what will the equilibrium price be in this market?
Q: Consider a Cournot Oligopoly. One firm has costs C1(Q1) = 12Q1 while the other firm’s cost function…
A: The Cournot oligopoly model is the most famous model of the blemished contest. In the Cournot model,…
Q: There are two different market under the Galata Bridge. One of them is fried fish sandwich and the…
A: NOTE: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question…
Q: Assume that two companies (A and B) are duopolists who produce identical products. Demand for the…
A: We have, Demand function: P = 200-QA- QB Total cost of firm A: TCA = 1500 + 55QA +QA^2 Total cost of…
Q: Consider a homogeneous product industry comprising two firms, N = {1,2}, that compete by choosing…
A: There are two firms - Firm 1 & 2 MC of firm 1: c1 = 3 MC of firm 2 : c2 = 2 In a Cournot…
Q: The inverse demand curve for a Stackelberg duopoly is P = 10,000 - 6Q. The leader's cost structure…
A: A reaction curve RC, also called reaction function or best-reply function, is the locus of optimal,…
Q: Alpha and Gamma are the only two phone handset manufacturers in the world. Each firm has a cost…
A: An oligopoly market is one that has few large firms which are interdependent selling homogenous as…
Q: Consider a COURNOT duopoly. Market demand is P(Q)=18-2Q, and each firm faces a marginal cost of $5…
A: Cournot competition is an economic model for describing an industry structure in which enterprises…
Q: Consider a Bertrand duopoly. Both firms produce an identical good at the same constant marginal cost…
A: Given Demand function Q=100-P P=100-Q MC=$0.80
Q: Suppose the inverse demand function for two Cournot duopolists is given by P = 10 −(Q1+ Q2)…
A: Demand Function is: P = 10- (Q1+Q2) Total Cost (TC) = 0 Marginal Cost (MC) = 0 1. Total Revenue…
Q: Firm 1 and Firm 2 are Cournot competitors. They both have the following cost function, C (Qi) =…
A: A firm will maximise profit at a point where marginal revenue is equal to marginal cost.
Q: If a duopolist has a linear demand curve of the form Q=400 – P. Assuming each firm has total cost…
A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: Consider an industry composed of only two firms, each producing an identical product. The two firms…
A: We have stackleberg competition between two firms where they both have the same cost structure.
Q: i) Consider two firms competing on output choice in an oligopoly market and selling homogeneous…
A: In stackleberg quantity competition, leader firm uses the best response function of the follower to…
Q: The inverse demand function in an industry with two firms is given as p = 50 – 2y, where y is the…
A: "Since you have posted multiple sub-parts question, we can solve first three parts, rest you need to…
Q: Suppose that two duopolists (firm A and Firm B) produce identical products. The firms face the…
A:
Q: There are two different market under the Galata Bridge. One of them is fried fish sandwich and the…
A: Given, PF = 100-qF+ -0.5qp => qF = 100-PF+ 0.5
Q: Consider a market structure comprising two identical firms (A and B), each with the cost function…
A: Market demand : P = 210 − 1.5Q, where Q = QA + QB Firm A P = 210-1.5QA-1.5QB…
Q: Consider the following Cournot duopoly. Both firms produce a homogenous good. The demand function is…
A: Cournot Duopoly is that form of oligopoly in which both firms simultaneously optimize their output…
Q: Assume that two companies (A and B) are duopolists who produce identical products. Demand for the…
A: As per our policy, we'll solve the first three subparts. Kindly repost the question to get answers…
Q: Q6 Suppose the market demand is given by Q 3 100 — р, where Q is the total quantity demanded and p…
A: For most competitive equilibria, the First Order Conditions for profit maximisation can be deduced…
Q: Suppose the inverse demand function for two Cournot duopolists is given by P = 10 – (Q1 + Q2) and…
A: Given, Demand function, P= 10 - Q1 – Q2 Here Q1 = quantity of the firm 1 and Q2 = quantity of the…
Q: Firm A with total cost function CA = 60qA and Firm B with total cost function CB = 80qB are the only…
A: here we calculate the equilibrium price by using the two cost function of the Firm , so calculation…
Q: Two identical firms currently serve a market. Each has a cost function of C(q) = 30q. Market demand…
A: Demand function : P = 80 − 0.01Q Cost for each firm : C(q) = 30q Cost function of merged identity…
Q: Consider a duopoly where firms compete for market share by setting prices. The firms produce…
A: 1. According to the question Q1 = 100 – 2P1 + 2P2 Q2 = 120 – 4P2 + P1 MC1 = 30, MC2 = 20 Here Q1 –…
Q: If a duopolist has a linear demand curve of the form Q=400 – P. Assuming each firm has total cost…
A: Under duopoly, there are two firms competing against each other based on different duopoly models.…
Q: Consider a market for crude oil production. There are two firms in the market. The marginal cost of…
A: Answer: Given, Inverse demand curve: PQ=200-QWhere,Q=q1+q2 Marginal cost of firm 1:MC1=20Marginal…
Q: Assume that two companies (C and D) are duopolists that produce identical products. Demand for the…
A: Given P=600-Qc-Qd TCc=25,000+100Qc (Total Cost of Company C) TCd=20,000+125Qd (Total Cost of…
Q: If a duopolist has a linear demand curve of the form Q=400 – P. Assuming each firm has total cost…
A: Cournot competition is an associate economic model during which competitive corporations opt for an…
Q: Consider a COURNOT duopoly. Market demand is P(Q)=140-Q and each firm faces a constant marginal cost…
A: In a cournot duopoly firm's take simultaneous decision.
Q: Suppose there are two duopolists that have fixed costs of $ 60, variable costs of $ 10, and have the…
A: For answer (A), We have Total cost (TC) = 60 + 10Q for both the firms. Profit for firm 1 is given…
Q: Consider two identical firms with similar cost functions given by C, = cq, and C2 = cq2. The inverse…
A: Quasi-competitive model can be defined as the pricing model in oligopoly market where each of the…
Q: There are two firms A and B. Firms compete in a Cournot Duopoly in Karhide. They set quantities qA…
A: The cost is divided into two categories that are fixed cost and variable cost. The total fixed cost…
Q: Suppose that identical duopoly firms have constant marginal costs of $10 per unit. Firm 1 faces a…
A: In the Bertrand model, the function of monopoly profit is bounded, firms have identical and constant…
Q: Suppose two brothers own identical skydiving companies but have decided to experiment with different…
A: The above given question let us analyse in the following way: Older brother-Air adventure-charges…
Q: Consider a Cournot duopoly with the following inverse demand function: P = 4,000 – 4Q1 - 4Q2. The…
A: The type of market structure in which an exactly same product is produced and sold by two producers…
Q: Gamma and Zeta are the only two widget manufacturers in the world. Each firm has a cost function…
A: We have here:- Total cost=TC=10+10q+q2 Inverse demand function=P=100-Q=100-q1-q2 marginal…
Q: Duopolists following the Bertrand pricing strategy face a market demand curve given by P 90 - 2Q…
A: Duopolists following Bertrand pricing, demand curve : P = 90 - 2Q and marginal cost is 40 per unit.…
Q: Consider two price-setting oligopolies supplying consumers in a certain region of a country. Firm 1…
A:
Q: Suppose two types of consumers buy suits. Consumers of type A will pay $100 for a coat and $50 for…
A: Bundling refers to the process that firms sell one or more goods with the specified selling good.…
Q: Two firms both produce leather boots. The inverse demand equation is given by P = 280 Q, where P is…
A: Inverse demand function, P = 280 – Q Where Q = q1 + q2, q1 is the quantity produced by the first…
Q: Three electricity generating firms are competing in the market with the inverse demand given by P(Q)…
A: Firm1: π= (20-q1- q2-q3)q1 - 5q1 Best response curve: 20 - 2q1 - q2- q3 - 5 =0 15 - q2- q32= q1_[1]…
Q: For Company A, the long-run equilibrium output is and the selling price is $ .…
A:
Q: Consider an industry composed of only two firms, each producing an identical product. The two firms…
A: We have stackleberg competition between two firms and they both have identical costs.
Q: Assume that two companies (A and B) are duopolists who produce identical products. Demand for the…
A: The demand function represents the connection between the quantity demanded of a commodity…
Q: You are given the market demand function Q = 1000 – 1000p, and that each duopoly firm's marginal…
A: The simple Cournot assumption is that every company chooses its quantity, taking as given the amount…
Q: Firms A and B choose how much of a a homogenous good to produce at a marginal cost of 1. The inverse…
A: Given information 2 firms Firm A and Firm B Demand function P=25-QA-QB MC-1 Output can by any number…
Q: Suppose the inverse demand function for two Cournot dupolists is given by P= 10 – (Q1+Q2) and their…
A: Given, The inverse demand function, P = 10 – (Q1+Q2) P = 10 –Q1 – Q2 Total cost= TC = MC =0 a) Total…
Q: Two firms both produce leather boots. The inverse demand equation is given by P = 280 Q, where Pis…
A: According to the question, there are 2 firms in oligopoly and creating the Bertrand model. Let say…
Suppose two firms compete as Bertrand duopolists for an identical product, where demand is given by Q = 5000 – 50P and both firms have marginal cost of 10 per unit of output. If firm 1 has capacity of 1500 and firm 2 has capacity of 2000, what will the
Step by step
Solved in 2 steps
- Suppose the inverse demand for a particular good is given by P = 1200-12Q. Furthermore, there are only two firms, A and B. Firm A's marginal cost is a constant $25, and Firm B's marginal cost is a constant $20. Assume these two firms engage in Cournot competition. If we assume that the firm with the lowest costs could supply the entire market, then the deadweight loss due to the market power these two firms exert through Cournot competition equals $. 4 [Round your answer to the nearest two decimals.]Two firms sells an identical product. The demand function for each firm is given: Q = 20 - P, where Q = q1 + q2 is the market demand and P is the price. The cost function for reach firm is given: TCi = 10 + 2qi for i = 1, 2. a) If these two firms collude and they want to maximize their combined profit, how much are the market equilibrium quantity and price? b) If these two firms decide their production simultaneously, how much does each firm produce? What is the market equilibrium price? c) If Firm 1 is a leader who decides the production level first and Firm 2 is a follower, how much does each firm produce? What is the market equilibrium price?Two firms - firm 1 and firm 2 - share a market for a specific product. Both have zero marginal cost. They compete in the manner of Bertrand and the market demand for the product is given by: q = 20 − min{p1, p2}. 1. What are the equilibrium prices and profits? 2. Suppose the two firms have signed a collusion contract, that is, they agree to set the same price and share the market equally. What is the price they would set and what would be their profits? For the following parts, suppose the Bertrand game is played for infinitely many times with discount factor for both firms δ ∈ [0, 1). 3. Let both players adopt the following strategy: start with collusion; maintain the collusive price as long as no one has ever deviated before; otherwise set the Bertrand price. What is the minimum value of δ for which this is a SPNE. 4. Suppose the policy maker has imposed a price floor p = 4, that is, neither firm is allowed to set a price below $4. How does your answer to part 3 change? Is it now…
- Suppose there are just two firms, 1 and 2, in the oil market and the inverse demand for oil is given by P = 60 – Q. The marginal cost for each firm is €24. What price should Firm 1 charge at the Cournot equilibrium?Consider a market for crude oil production. There are two firms in the market. The marginal cost of firm 1 is 20, while that of firm 2 is 20. The marginal cost is assumed to be constant. The inverse demand for crude oil is P(Q)=200-Q, where Q is the total production in the market. These two firms are engaging in Cournot competition. Find the production quantity of firm 1 in Nash equilibrium. If necessary, round off two decimal places and answer up to one decimal place.There are two firms selling differentiated products. Firm A faces the following demand for his product: QA=20-1/2PA+1/4PB Firm B faces the following demand: QB=220-1/2PB+1/4PA PA represents the price set by firm A. PB represents the price set by firm B.Assume that the marginal cost is zero both for firm A and firm B.What are the equilibrium prices of a simultaneous price competition?What would the equilibrium prices be if A is the leader and B is the follower?
- Two firms compete in selling homogeneous goods. They choose their output levels q1 and q2 simultaneously and face demand curve P=80-6Q, where Q=q1+q2. The total cost function of firm 1 is C1=8q1 and the total cost function of firm 2 is C2=32q2+2/3. a) Find and draw the reaction curves of the two firms. b) Compute equilibrium quantities, price and profits. Suppose now that firm 2, thanks to a technological innovation, becomes more efficient. The new total cost function of firm 2 is C2=8q2 c) Compute the new equilibrium quantities, price and profits.Firm 1 and firm 2 are Bertrand duopoloists. Firm 1 has a marginal cost of $6.00 per unit, and firm 2 has a marginal cost of $8.01 per unit. The demand for their product is p=23.00−Q, where Q is the total quantity demanded. How much does each firm sell in equilibrium? Assume that prices can only be set to the nearest cent, firms split the market if they set the same price, and there are no fixed costs. Firm 1 production:______ Firm 2 production:______ What are the profits for each firm in equilibrium? Firm 1 profit: $______ Firm 2 profit: $______Consider the Cournot competition between two firms with different marginal costs. For firm 1, let the cost function be: C1(q1)-3*q1 For firm 2, let the cost function be: C2(q2)-6*q2 The inverse demand function is: P(Q)=12-Q, where Q=q1+q2 In this game, write down the profit functions for firm 1 and firm 2 (as functions of q1 and q2). Then, find the Nash equilibrium quantities for firm 1 and firm 2. In the NE, which firm produces more: the one with the low or the high marginal cost? Note: To get credit, you need to show your calculations and explain your answer.
- Consider a market with two horizontally differentiated firms, X and Y. Each has a constant marginal cost of $20. Demand functions are: Qx =100−2Px +1Py Qy =100−2Py +1Px Calculate the Bertrand equilibrium in prices in this market. How will the equilibrium change if cross-price elasticities of demand increase by 20%? How would you alter the equations to show such an increase? Compute the new equilibriumConsider a Cournot duopoly. The market demand function is P = 180 – 2(q₂ + q₂), where P is the market price, q₂ is the output produced by Firm 1 and q₂ is the output produced by Firm 2. The two firms have a constant marginal cost c = 30. What is the total output in this market? Round your answer to the nearest integer (e.g. 50)Two firms compete by choosing price. Their demand functions are Q, = 200 - P, +P2 and Q2 = 200 + P, - P2, where P, and P, are the prices charged by each firm, respectively, and Q, and Q, are the resulting demands. Note that the demand for each good depends only on the difference in prices; if the two firms colluded and set the same price, they could make that price as high as they wanted, and earn infinite profits. Marginal costs are zero. Suppose the two firms set their prices at the same time. Find the resulting Nash equilibrium. What price will each firm charge, how much will it sell, and what will its profit be? (Hint: Maximize the profit of each firm with respect to its price.) Each firm will charge a price of $ . (Enter a numeric response rounded to two decimal places.)