Question

Suppose duopolists face the market inverse demand curve P = 100 - Q, Q = q1...

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

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
24. Cournot duopolists face a market demand curve given by P = 90 - Q where...
24. Cournot duopolists face a market demand curve given by P = 90 - Q where Q is total market demand. Each firm can produce output at a constant marginal cost of 30 per unit. There are no fixed costs. Determine the (1) equilibrium price, (2) quantity, and (3) economic profits for the total market, (4) the consumer surplus, and (5) dead weight loss. 25. If the duopolists in question 24 behave according to the Stackelberg Leader-Follower model, determine the...
Q1. Consider a Cournot oligopoly in which the market demand curve is Q = 60 -...
Q1. Consider a Cournot oligopoly in which the market demand curve is Q = 60 - P. There are two firms in this market, so Q = q1 + q2. The firms in this market are not identical: Firm 1 faces cost function c1(q1) = 2q12, while firm 2's cost function is c2(q2) = 28q2. In the space below, write down a function for Firm 1's profit, in terms of q1 and q2. Q2. Refer back to the Cournot oligopoly...
Consider a two-firm oligopoly facing a market inverse demand curve of P = 100 – 2Q,...
Consider a two-firm oligopoly facing a market inverse demand curve of P = 100 – 2Q, where Q is the sum of q1 and q2. q1 is the output of Firm 1 and q2 is the output of Firm 2. Firm 1's marginal cost is constant at $12, while Firm 2's marginal cost is constant at $20. Answer the following questions, assuming that the firms are Cournot competitors. a. How much output does each firm produce? (answer is q1 =...
Consider three firms that face market demand P = 101 - Q. The cost functions are...
Consider three firms that face market demand P = 101 - Q. The cost functions are C1(q1)=6(q1^2) for firm 1, C2(q2)=4(q2^2) for firm 2, and C3(q3)=4q(3^2) for firm 3. Firm 1 is the Stackelberg leader and firms 2 and 3 are the followers. What is firm 1's equilibrium output q1^*?
The market demand function is Q=10,000-1,000p. Each firm has a marginal cost of m=$0.16. Firm 1,...
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...
Three oligopolists operate in a market with inverse demand given by p (Q ) = a...
Three oligopolists operate in a market with inverse demand given by p (Q ) = a −Q , where Q = q1 + q2 + q3, and qi is the quantity produced by firm i. Each firm has a constant marginal cost of production, c and no fixed cost. The firms choose their quantities dy- namically as follows: (1) Firm 1, who is the industry leader, chooses q1 ≥ 0; (2) Firms 2 and 3 observe q1 and then simultaneously...
1. Consider a market with inverse demand P (Q) = 100 Q and two firms with...
1. Consider a market with inverse demand P (Q) = 100 Q and two firms with cost function C(q) = 20q. (A) Find the Stackelberg equilibrium outputs, price and total profits (with firm 1 as the leader). (B) Compare total profits, consumer surplus and social welfare under Stackelberg and Cournot (just say which is bigger). (C) Are the comparisons intuitively expected? 2. Consider the infinite repetition of the n-firm Bertrand game. Find the set of discount factors for which full...
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....
Question 4 Consider the following game. Firm 1, the leader, selects an output, q1, after which...
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 an industry with the inverse demand function P(Q) = 12 − Q, where Q is...
Consider an industry with the inverse demand function P(Q) = 12 − Q, where Q is the sum of the outputs q1 and q2 of the two firms in the industry. There is only fixed cost in production (e.g. investment cost for machine) but no variable cost for producing each output (e.g. zero cost for inputs). Both two firms have the same fixed cost at 4. No fixed cost incurs if a firm decides not to operate. Suppose that firm...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT