Question

Suppose there are *n* firms in a Cournot oligopoly model.
Let *q _{i}*denote the quantity produced by firm

Answer #1

Assume that there are 4 firms in a Cournot oligopoly game. Let
qi denote the quantity produced by firm i, and let q =
q1 + q2 + q3 + q4
denote the aggregate quantity on the market. Let P be the market
clearing price and assume that the market inverse demand equation
is P(Q) = 80 – Q. The total cost of each firm i from producing
quantity qi is Ci(qi) =
20qi. The marginal cost, 20, is constant...

N firms, in a Cournot oligopoly are facing the market demand
given by P = 140 – 0.4Q, where P is the market price and Q is the
market quantity demanded. Each firm has (total) cost of production
given by C(qi) = 200 + 10qi, where qi is the quantity produced by
firm i (for i from 1 to N).
New firms would like to enter the market if they expect to make
non-negative profits in this market; the existing...

Consider a Cournot model with two firms, firm 1 and firm 2,
producing quantities q1 and q2, respectively. Suppose the inverse
market demand function is: P = 450 – Q where Q denotes the total
quantity supplied on the market. Also, each firm i = 1,2 has a
total cost function c(qi) = 30qi. a) What is the Nash equilibrium
of this Cournot game ? What is the market prices ? Compute each
firm’s profit and the industry profit. b)...

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)

Consider a Cournot duopoly operating in a market with inverse
demand P(Q) = a - Q, where Q = q1 + q2 is the aggregate quantity on
the market. Both firms have total costs ci(qi) = cqi, but demand is
uncertain: it is High (a = aH) with probability theta and low (a=
aL) with probability 1 - theta. Furthermore, information is
asymmetric: firm 1 knows whether demand is high or low, but firm 2
does not. All this is...

A product is produced by two profit-maximizing firms in a
Stackelberg duopoly: firm 1 chooses a quantity q1 ? 0, then firm 2
observes q1 and chooses a quantity q2 ? 0. The market price is
determined by the following formula: P ( Q ) = 4 ? Q , where Q =
q(1) +q(2) . The cost to firm i of producing q i is Ci( qi ) =
q^2)i . (Note: the only difference between this problem and...

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...

Suppose there are n firms in an oligopoly, the inverse
demand is given by P(Q) = a - Q, where Q =
q1+q2+...+qn. Consider the
infinitely repeated game based on this stage game.
a) What is the lowest value of δ such that the
firms can use trigger strategies to sustain the monopoly output
level in a SPNE?
b) How does the answer vary with n and why?
c) If δ is too small for the firms to use
trigger...

There is a Cournot duopoly competition between Firm 1 and Firm
2. The inverse demand function is given by P(Q)=100-q, where
Q=q1+q2 and qi denotes the quantity produced by firm i for all iÎ
{1, 2} and the cost function is given by ci(qi)=10qi. Describe this
problem as a normal-form game. Find pure-strategy Nash Equilibria
for both firms.

There is a Cournot game consisting of two different firms that
produce the same goods.
Quantity produced by firm one = q
Quantity produced by firm two = q2
The marginal cost for firm one equals average cost, which is
3.
The marginal cost for firm two equals average cost, which is
4.
The formula for the inverse demand curve of the market is P = 70
- (q1 +q2).
Answer the following questions with work:
1. What is the...

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