Question

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:

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
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?
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, 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
The market inverse demand curve is P = 85 – Q. There are i firms in...
The market inverse demand curve is P = 85 – Q. There are i firms in the market with all firms (plants) that have cost function TCi = 20 + qi + qi^2. Find the market profit for a maximizing multiplant-monopoly assuming two plants.
Consider an ?-firm Cournot model with identical firms and homogeneous products; the inverse demand function, marginal...
Consider an ?-firm Cournot model with identical firms and homogeneous products; the inverse demand function, marginal costs, and fixed costs are ? = ? − ??, ?, and zero, respectively. The equilibrium price is ? ∗ = ? + ?−? ?+1 . (a) Analyse what happens to consumer surplus, producer surplus, and total surplus as the number of firms increases. [5 marks] (b) Discuss how your answer may differ if the firms have U-shaped cost curves. [5 marks]
Consider two identical firms competing in a market described by: • (Inverse) Demand: P = 50...
Consider two identical firms competing in a market described by: • (Inverse) Demand: P = 50 − Q , where Q = q1 + q2 • Cost Firm 1: C1 = 20q1 +q1^2 • Cost Firm 2: C2 = 20q2 + q2^2 a. (1 point) What is firm 1’s marginal cost? Firm 2’s marginal cost? What can you observe about these two firms? b.(2 points) What are the equilibrium price (P∗), production quantities (q∗1,q∗2), and profits(π∗1,π∗2), if these firms are...
Consider two identical firms competing in a market described by: • (Inverse) Demand: P = 50...
Consider two identical firms competing in a market described by: • (Inverse) Demand: P = 50 − Q , where Q = q1 + q2 • Cost Firm 1: C1 = 20q1 +q1^2 • Cost Firm 2: C2 = 20q2 + q2^2 a. (1 point) What is firm 1’s marginal cost? Firm 2’s marginal cost? What can you observe about these two firms? b.(2 points) What are the equilibrium price (P∗), production quantities (q∗1,q∗2), and profits(π∗1,π∗2), if these firms are...
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...
1) Two firms, a and b, in a Cournot oligopoly face the inverse demand function p...
1) Two firms, a and b, in a Cournot oligopoly face the inverse demand function p = 300 – Q. Their cost function is c (qi) = 25 + 50qi for i = a, b. Calculate the profit maximizing price output combination. (3)
In a homogenous good market two firms, A and B, are producing with the same technology....
In a homogenous good market two firms, A and B, are producing with the same technology. Firm i’ s total cost function is C(qi) = 10 + 20qi, where i= A,B. The inverse demand function for the good is given by P(qA+qB) = 150 – (qA+qB). a) Assume that the firms choose simultaneously their quantities. Find the market price and determine firm’s profits and consumer surplus at that price. b) If the two firms set simultaneously their prices, instead of...