Question

The demand function facing a duopoly is P=1000-3(q_{1} +
q_{2} ). Suppose marginal cost is 10 for each firm and
fixed costs are 50 for each. Find the optimal outputs, price, and
profits when firm 1 is a von Stackelberg leader. Show your
work.

Answer #1

please check the calculation

If you like the work please appreciate thank you !

Given the Inverse Demand function as P = 1000-(Q1+Q2) and Cost
Function of firms as Ci(Qi) = 4Qi calculate the following
values.
A. In a Cournot Oligopoly (PC, QC, πC)
i. Find the Price (Pc) in the market,
ii. Find the profit maximizing output (Qi*) and
iii. Find the Profit (πiC) of each firm.
B. In a Stackelberg Oligopoly (PS, QS, πS),
i. Find the Price (PS) in the market,
ii. Find the profit maximizing output of the Leader (QL*)...

Suppose duopolists face the market inverse demand curve P = 100
- Q, Q = q1 + q2, and both firms have a constant marginal cost of
10 and no fixed costs. If firm 1 is a Stackelberg leader and firm
2's best response function is q2 = (100 - q1)/2, at the
Nash-Stackelberg equilibrium firm 1's profit is $Answer

The market demand function is Q=10,000-1,000p.
Each firm has a marginal cost of m=$0.16. Firm 1, the leader,
acts before Firm 2, the follower. Solve for the Stackelberg-Nash
equilibrium quantities, prices, and profits. Compare your solution
to the Cournot-Nash equilibrium.
The Stackelberg-Nash equilibrium quantities are:
q1=___________ units
and q2=____________units
The Stackelberg-Nash equilibrium price is:
p=$_____________
Profits for the firms are
profit1=$_______________
and profit2=$_______________
The Cournot-Nash equilibrium quantities are:
q1=______________units
and q2=______________units
The Cournot-Nash equilibrium price is:
p=$______________
Profits for the...

6: When we have a homogeneous product duopoly, each firm has
constant marginal cost of 10. The market inverse demand curve is p
= 250 – 2Q where Q = q1 + q2 is the sum of the outputs of firms 1
and 2, and p is the price of the good. Marginal and average cost
for each firm is 10. (a) In this market, what are the Cournot and
Bertrand equilibrium quantities and prices? Will the firms collude
in...

The inverse market demand in a homogeneous-product Cournot
duopoly is P=200-3(Q1+Q2) and costs are C1(Q1)=26Q1 and
C2(Q2)=32Q2, find the optimal output, price, and maximized profit
if the two oligopolists formed a cartel whose MC is the average
between the oligopolists’ marginal costs. Assume the cartel splits
profit equally among oligopolists.

The inverse market demand in a homogeneous-product Cournot
duopoly is P = 200 – 3(Q1 +
Q2) and costs are
C1(Q1) =
26Q1 and
C2(Q2) =
32Q2.
a. Determine the reaction function for each firm.
Firm 1: Q1
= - Q2
Firm 2: Q2
= - Q1
b. Calculate each firm’s equilibrium output.
Firm 1:
Firm 2:
c. Calculate the equilibrium market price.
$
d. Calculate the profit each firm earns in equilibrium.
Firm 1: $
Firm 2: $

Two firms compete as a Stackelberg duopoly. Firm 1 is the market
leader. The inverse market demand they face is P = 62 - 2Q, where
Q=Q1+Q2. The cost function for each firm is C(Q) = 6Q. Given that
firm 2's reaction function is given by Q2 = 14 - 0.5Q1, the optimal
outputs of the two firms are:
a. QL = 9.33; QF = 9.33.
b. QL = 14; QF = 7.
c. QL = 6; QF = 3....

Question 4 Consider the following game. Firm 1, the leader,
selects an output, q1, after which firm 2, the follower, observes
the choice of q1 and then selects its own output, q2. The resulting
price is one satisfying the industry demand curve P = 200 - q1 -
q2. Both firms have zero fixed costs and a constant marginal cost
of $60. a. Derive the equation for the follower firm’s best
response function. Draw this equation on a diagram with...

Consider the Stackelberg model with demand function p(q_1,
q_2)=10-q_1-q_2p(q1,q2)=10−q1−q2 and cost functions
c_1(q_1)=q_1c1(q1)=q1, c_2(q_2)=2q_2c2(q2)=2q2.
Draw the game tree and solve for the pure SPE.
Write down each firm's strategy in the pure SPE here: Firm 1:,
Firm 2:

Consider a duopoly with each firm having different marginal
costs. Each firm has a marginal cost curve MCi=20+Qi for i=1,2. The
market demand curve is P=26−Q where Q=Q1+Q2.
What are the Cournot equilibrium quantities and price in this
market?
What would be the equilibrium price in this market if the two
firms acted as a profit-maximizing cartel ((i.e., attempt to set
prices and outputs together to maximize total industry profits
))?
What would be the equilibrium price in this market...

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 6 minutes ago

asked 18 minutes ago

asked 19 minutes ago

asked 35 minutes ago

asked 46 minutes ago

asked 46 minutes ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago