What is the payoff to firm i if the two firms engaged in collusion to maintain monopoly output and prices. Assume that each firm gets half the monopoly profit.
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Two firms are engaged in duopoly competition in a market with demand Q = 120 - p and zero costs.
The reaction function for firm i given firm j's output q i = 60 - 1 2 q j .
What is the payoff to firm i if the two firms engaged in collusion to maintain
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- 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?Consider a duopoly, i.e., an industry with only two firms: firm A and firm B, making the same product. The industry’s inverse demand is P(Q)=320−(1/5)Q, where P is the market price and Q is the total industry output. Each firm has a marginal cost MC of $20. There are no fixed costs and no barriers to exit the market. a) Suppose that the two firms engage in Cournot competition. Find the equilibrium price PNE in the industry, the equilibrium outputs QANE and QBNE, as well as the profits πANE and πBNE, for each firm. b) Suppose the marginal cost for firm B increases from $20 to $140, while everything else remains unchanged. Find the new equilibrium price PNE in the industry, the new equilibrium outputs QANE and QBNE, as well as the new profits πANE and πBNE for each firm. c) Suppose that, in addition to the marginal cost increase from $20 to $140 from sub question b), firm B also has a fixed cost of $2500, out of which $2100 may be recouped if it shuts down; everything else remains…Consider two price-setting oligopolies supplying consumers in a certain region of a country. Firm 1 employs many of the people living there and the local government subsidizes its operations. In all other respects, the firms are identical-they have the same constant marginal cost, MC = 4, and produce the same good. The demand function for Firm 1 is q1 = 600 - 50p1 - 20p2 and for Firm 2 is q2 = 600 - 50p2 - 20p1, where p1 is Firm 1's price and p2 is Firm 2's price. a. What are the Nash-Bertrand equilibrium prices and quantities without the subsidy? b. What are they if Firm 1 receives a per-unit subsidy of S = 1? Compare the two equilibria.
- Two firms are engaged in Cournot (simultaneous quantity) competition. Market-level inverse demand is given by P = 160 − 4Q Firm 1 has constant marginal costs of MC1 = 8, while Firm 2 has constant marginal costs of MC2 = 24. 1) Does there exist a low enough positive marginal cost for firm 1 such that firm 1 acts like a monopoly in this market, if so what is the MC if not why?Consider a Cournot duopoly. The market demand function is P = 112-1(q1 + q2), where P is the market price, q1 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 = 17. What is Firm 2's profit ? Round your answer to the nearest integer (e.g. 50)Consider 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)
- Market demand for widgets is p = 160 - 2Q. Whether there is just one firm selling widgets or many firms selling widgets, the marginal cost and average cost is 100.Assume there are two firms selling widgets acting as Stackelberg duopolists, with Firm 1 moving first and Firm 2 following. Further assume that Firm 1's marginal profit function at its maximum is Mπ(q1) = 75 - q1, where q1 is the amount of widgets sold by Firm 1. What is the quantity sold for each firm?Options are:Firm 1 sells 0 Firms 2 sells 80Firm 1 sells 25 firm 2 sells 64.5Firm 1 sells 15, Firm 2 sells 30Firm 1 sells 7.5 Firm 2 sells 15From question 12 (Stackelberg duopolists), what is the price of widgets?Options are:1501158565Suppose 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.]Cournot duopolists face a market demand curve given by P = 60 – 1/2Q, where Q is total market demand in units. Each firm can produce output at a constant marginal cost of $15/unit. a) What is the equilibrium price and quantity produced by each firm? b) What if the firm's engaged in Bertrand competition? c) What if one of the firms chose its quantity before its competitor? What is the name for this sort of competition? d) Which of the three forms of competition gives the greatest social surplus?
- Cournot Duopoly Suppose that Coca Cola and Pepsi companies compete in quantity sold in a small town. The market demand function for soda in the small town is given by the demand function: Q 10,000 P where Q is the aggregate quantity demanded and P is the price of a can of soda. Let Qp be the number of cans of soda sold by the Pepsi company and Qc be the number sold by the Coca Cola company. Assuming that the marginal cost of producing a can of soda is the same for both companies and equal to 50 cents, find the Nash equilibrium of the soda market in this small town. Illusrate the Nash equilibrium by using the best repsonse functions of both companies. %3DConsider a duopoly where firms compete for market share by setting prices. The firms produce differentiated products and face the following demand functions where q is output and P is the price in dollars. q1 = 100 – 2P1 + 2P2 Demand Function for Firm 1 q2 = 120 – 4P2 + P1 Demand Function for Firm 2 Suppose that firm 1 is able to produce output at a constant marginal cost of $30 and that firm 2 is able to produce output at a constant marginal cost of $20. Both firms operate with no fixed costs. Derive the best response function for firm 1. Derive the best response function for firm 2.Three firms, A, B and C engage in Bertrand price competition in a market with inverse demand given by P = 123 − 2Q. Whenever a firm undercuts the rivals’ price, it gets the entire demand. If firms charge the same lowest price in the market, they share the market. If a firm charges a price more than any rival, it has zero market share. Suppose there are no fixed costs, and the marginal costs of the firms are: c(A) = 91, c(B) = 83 and c(C) = 43. a. Find a Nash equilibrium of this game. What are each firm’s prices and profits? Explain your solution. b. Suppose firm B leaves the market. Draw each firm’s best response on a diagram and find a Nash equilibrium of this duopoly game. c. Suppose the above game in part b between firms A and C was the stage game of an infinitely repeated game. Would it be possible for the two firms to collude or form a cartel in this case? "Economic "
