Question

Two firms compete in a Bertrand setting for homogeneous products. The market demand curve is given...

Two firms compete in a Bertrand setting for homogeneous products. The market demand curve is given by Q = 100 – P, where Q is quantity demanded and P is price. The cost function for firm 1 is given by C(Q) = 10Q and the cost function for firm 2 is given by C(Q) = 4Q. What is the Nash-Equilibrium price? What are the profits for each firm in equilibrium?

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Two firms, a and b, compete in a market to sell homogeneous products with inverse demand...
Two firms, a and b, compete in a market to sell homogeneous products with inverse demand function P = 400 – 2Q where Q = Qa + Qb. Firm a has the cost function Ca = 100 + 15Qa and firm b has the cost function Cb = 100 + 15Qb. Use this information to compare the output levels, price, and profits in settings characterized by the following markets: a, Cournot b, Stackelberg c, Bertrand d, Collusion
Two firms, a and b, compete in a market to sell homogeneous products with inverse demand...
Two firms, a and b, compete in a market to sell homogeneous products with inverse demand function P = 400 – 2Q where Q = Qa + Qb. Firm a has the cost function Ca = 100 + 15Qa and firm b has the cost function Cb = 100 + 15Qb. Use this information to compare the output levels, price and profits in settings characterized by the following markets: Cournot Stackelberg Bertrand Collusion
Two firms sell identical products and compete as Cournot (price-setting) competitors in a market with a...
Two firms sell identical products and compete as Cournot (price-setting) competitors in a market with a demand of p = 150 - Q. Each firm has a constant marginal and average cost of $3 per unit of output. Find the quantity each firm will produce and the price in equilibrium.
Suppose that two firms compete in the same market producing homogenous products with the following inverse...
Suppose that two firms compete in the same market producing homogenous products with the following inverse demand function: P=1,000-(Q1+Q2) The cost function of each firm is given by: C1=4Q1 C2=4Q2 Suppose that the two firms engage in Bertrand price competition. What price should firm 1 set in equilibrium? What price should firm 2 set? What are the profits for each firm in equilibrium? What is the total market output? Suppose that the two firms collude in quantity, i.e., acting together...
Two firms compete in a market with inverse demand P = 120 − Q. Firm 1...
Two firms compete in a market with inverse demand P = 120 − Q. Firm 1 has cost function C(q1) = 20q1 and Firm 2 has cost function C(q2) = 10q2. Solve for the Bertrand equilibrium in which firms choose price simultaneously.
Consider two firms competing to sell a homogeneous product by setting price. The inverse demand curve...
Consider two firms competing to sell a homogeneous product by setting price. The inverse demand curve is given by P = 6 − Q. If each firm's cost function is Ci(Qi) = 2Qi, then consumer surplus in this market is:
Suppose there are 2 firms in a market. They face an aggregate demand curve, P=400-.75Q. Each...
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). a. If the 2 firms could effectively collude, how much would each firm produce? What is aggregate output? What is price? What are the profits for each firm? Provide a graph illustrating your answer. 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....
Suppose there are two firms operating in a market. The firms produce identical products, and the...
Suppose there are two firms operating in a market. The firms produce identical products, and the total cost for each firm is given by C = 10qi, i = 1,2, where qi is the quantity of output produced by firm i. Therefore the marginal cost for each firm is constant at MC = 10. Also, the market demand is given by P = 106 –2Q, where Q= q1 + q2 is the total industry output. The following formulas will be...
Two identical firms compete as a Cournet duopoly. The inverse market demand they face is P...
Two identical firms compete as a Cournet duopoly. The inverse market demand they face is P = 15 – 2Q. The cost function for each firm is C(q) = 6Q. Each firm will earn equilibrium profits of
Two firms compete to sell a homogenous good in a market characterized by a demand function...
Two firms compete to sell a homogenous good in a market characterized by a demand function Q = 250 – 1/4P. Each firm has the same cost function at C(Q) = $200Q. Use this information to compare the output levels and profits in settings characterized by Cournot, Stackelberg, Bertrand, and Collusive behavior.
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT