Question

Given 2 firms faced in a Bertrand Oligopoly with demand curves as follows: For Firm A...

Given 2 firms faced in a Bertrand Oligopoly with demand curves as follows: For Firm A QA = 400 – 4PA + 2PB For Firm B QB = 240 – 3PB + 1.5 PA Marginal cost for both firms is Zero Find the Bertrand Reaction Function for Firm A and the Price for firm A, PA with respect to PB

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
A city has two major league baseball teams, A and B. Demand for each is as...
A city has two major league baseball teams, A and B. Demand for each is as follows: Qa=10-­2Pa+Pb Qb=20-­2Pb+Pa Each team chooses price simultaneously (Bertrand competition with differentiated goods) in order to maximize its profit given that the marginal cost of an extra spectator at each game is zero for both teams.What price does each team charge for a ticket?
Managers at Firm A and Firm B must make pricing decisions simultaneously. The following demand and...
Managers at Firm A and Firm B must make pricing decisions simultaneously. The following demand and long-run cost conditions are common knowledge to the managers: Qa = 72 – 4Pa + 4 Pb                LACa = LMCa = 2 Qb = 100 – 3Pb + 4 Pa              LACb = LMC b = 6.67 2.1. Derive the best response curve for firm A 2.2. Derive the best response curve for firm B. 2.3. What will be the prices charged by firms...
Managers at Firm A and Firm B must make pricing decisions simultaneously. The following demand and...
Managers at Firm A and Firm B must make pricing decisions simultaneously. The following demand and long-run cost conditions are common knowledge to the managers: Qa = 72 – 4Pa + 4 Pb LACa = LMCa = 2 Qb = 100 – 3Pb + 4 Pa LACb = LMC b = 6.67 2.1. Derive the best response curve for firm A 2.2. Derive the best response curve for firm B.
Question 2: Managers at Firm A and Firm B must make pricing decisions simultaneously. The following...
Question 2: Managers at Firm A and Firm B must make pricing decisions simultaneously. The following demand and long-run cost conditions are common knowledge to the managers: Qa = 72 – 4Pa + 4 Pb LACa = LMCa = 2 Qb = 100 – 3Pb + 4 Pa LACb = LMC b = 6.67 2.1. Derive the best response curve for firm A 2.2. Derive the best response curve for firm B. 2.3. What will be the prices charged by...
Consider the Bertrand competition where Firm A's profit function is XA(PA, PB)= (pA)(QA(PA,PB))-(C(QA(PA,PB))) where QA(PA,PB) is...
Consider the Bertrand competition where Firm A's profit function is XA(PA, PB)= (pA)(QA(PA,PB))-(C(QA(PA,PB))) where QA(PA,PB) is the demand for firm A's product given the posted prices. Firm A's and B's products are identical, so consumers will go to the lowest price. QA(PA,PB)= Q(PA) if PA<PB, (1/2)(Q(PA)) if PA=PB, and 0 if PA>PB. where Q(P)=15.5-0.5P. However, make the change that firm B’s cost function is CB (Q) = 2Q. Firm A’s cost function remains the same at CA (Q) = Q....
Two firms, A and B, engage in Bertrand price competition in a market with inverse demand...
Two firms, A and B, engage in Bertrand price competition in a market with inverse demand given by p = 24 - Q. Assume both firms have marginal cost: cA = cB = 0. Whenever a firm undercuts the rival’s price, it has all the market. If a firm charges the same price as the rival, it has half of the market. If a firm charge more than the rival, it has zero market share. Suppose firms have capacity constraints...
Assume that you observe two firms operating in a Bertrand oligopoly. The inverse demand function for...
Assume that you observe two firms operating in a Bertrand oligopoly. The inverse demand function for the market is P = 200 – 2Q and each firm has the same cost function of C(Q) = 20Q. What is the level of production for each firm, market price, and profit of each firm? What would happen if both firms merge to form a single monopoly with a cost function of C(Q) = 20Q?
Given the Inverse Demand function as P = 1000-(Q1+Q2) and Cost Function of firms as Ci(Qi)...
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*)...
The market demand is given by P = 90 − 2Q. There are only two firms...
The market demand is given by P = 90 − 2Q. There are only two firms producing this good. Hence the quantity supplied in the market is the sum of each firm’s quantity supplied (that is, Q = qA + qB), where qj is the firm j 0 s quantity supplied). Firm A has zero marginal cost, while Firm B has the marginal cost of $30. Each firm has no fixed cost, and simultaneously chooses how many units to produce....
A firm produces two different goods, with demand given by the following: Pa = 200 –...
A firm produces two different goods, with demand given by the following: Pa = 200 – 25Qa – 2Qb and Pb = 75 – 2Qb Where Pa = price of good A, Pb = price of good B, Qa = quantity of good A and Qb = quantity of good B. The marginal costs for the two goods are 12 for good A and 20 for good B. Determine optimal prices and quantities for each good.
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT