Question

Suppose we have two identical firms A and B, selling identical products. They are the only firms in the market and compete by choosing quantities at the same time. The Market demand curve is given by P=200-Q. The only cost is a constant marginal cost of $17. Suppose the two firms collude and split the collusion quantity equally. What quantity will each firm produce if they colluded? Enter a number only

Answer #1

Suppose we have two identical firms A and B, selling identical
products. They are the only firms in the market and compete by
choosing prices at the same time. The Market demand curve is given
by P=450-6Q. The only cost is a constant marginal cost of $15. If
Firm A chooses a price of $250 what is Firm B's best response?
Enter a number only, no $ sign. Hint: this is a trick question,
check for what price would maximize...

Consider the following market: Two firms compete in quantities,
i.e., they are Cournot competitors. The firms produce at constant
marginal costs equal to 20. The inverse demand curve in the market
is given by P(q) = 260 − q.
a. Find the equilibrium quantities under Cournot competition as
well as the quantity that a monopolist would produce. Calculate the
equilibrium profits in Cournot duopoly and the monopoly
profits.
Suppose that the firms compete in this market for an infinite
number...

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 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 two firms compete in selling identical widgets. They
choose their output levels Q1 and Q2 simultaneously and face the
demand curve. P= 30 – Q, where Q = Q1 + Q2. Both firms have a
marginal cost of $9.
1. Suppose that the two firms compete by
simultaneously setting PRICES? What will the price be? How much
will each firm produce? What will each firm’s profits be?
2. Now, continue with the price-setting
assumption in (1), and assuming the...

2. Question 2
Consider two firms (A and B) engaging in Cournot Competition.
Both firms face an inverse market demand curve P(Q)=700-5Q, where
Q=qA+qB. The marginal revenue curve for firm A is MRA=700-10qA-5qB
and the marginal revenue curve for firm B is MRB=700-10qB-5qA. The
firms have identical cost functions, with constant marginal cost
MC=20.
A) Determine the profit function for firm A and firm B.
B) Solve for the best-response functions of both firms.
C) Determine the equilibrium quantities both...

Suppose there are two identical energy firms EnergyCo1 and
EnergyCo2 that behave as competitive duopolies in an energy supply
market. Suppose their marginal cost is given by $12 and the market
demand for energy is given by P=180-Q where Q represents the total
quantity of energy brought to the market by the two firms and P is
the price per unit of energy
1. what are the payoff and reaction functions of EnergyCo1 and
EnergyCo2 in duopoly game? Plot the...

Two firms compete in quantities. The firms are perfectly
symmetric, which makes the math easy! The inverse demand is given
by P= 80 − 0.5Q, where Q is total market demand. Each firm has
total costs c(q) = 20q.
a) Find the Cournot quantities, price, and profit of each
firm.
b) Now calculate the quantities, price and profit of each firm
if the two firms equally split the monopoly quantity (i.e. if they
collude).
c) Now calculate the quantities, price...

Consider two identical firms (no. 1 and no. 2) that face a
linear market demand curve. Each firm has a marginal cost of zero
and the two firms together face demand:
P = 50 - 0.5Q, where Q = Q1 + Q2.
a. Find the Cournot equilibrium Q and P for each firm. Calculate
the results rounded to the second digit after the decimal point
b. Find the equilibrium Q and P for each firm assuming that the
firms collude...

Assume that the demand in the market for widgets Sam Sings
Galaxy Andromeda is given by the equation D(p) = 500 - 10 * p.
Calculate the profit maximization quantity for each firm in this
market and the equilibrium price if:
a) the firm is the only one in the market;
b) there are two identical firms in the market, the firms choose
the quantity to produce simultaneous, and there is no
collusion;
c) there are two identical firms in...

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