1. In the basic Cournot model, both firms have constant marginal costs, c, and no fixedcosts. Show what happens in this model if both firms face a fixed cOst of F.

We are given that, both the firms have constant marginal cost in the cournot model. i.e, MC = c and…

Answered: 1. In the basic Cournot model, both…

1. In the basic Cournot model, both firms have constant marginal costs, c, and no fixed sts. Show what happens in this model if both firms face a fixed cost of F.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

fnan421 Word Gözden Geçir Görünüm Varam V Ne yapmak isted ginzi soyieyin 2) Two firms, X and Y, are planning to market their new products. Each firm can develop TV, Laptop. Market research indicates that the resulting profits to each firm for the alternative strategies are given by the following payoff matrix: FIRM Y TV LAPTOP PHONE FIRM X TV 30, 30 50, 35 20, 50 LAPTOP 40,70 20, 20 50,80 PHONE 50,20 80,50 10,10 A) Find the Nash equilibria for this game, assuming that both firms make their decisions at the same time. (explain the decision step by step)i B) If each firm is risk averse and uses a maximin strategy, what will be the resulting equilibrium? (explain the decision step by step);
11. In a Bertrand duopoly with homogenous goods and symmetric and identical constant marginal cost functions the Nash equilibrium has:. a. A price that is equal to marginal cost. b. Profits that are positive. c. The characteristic of strictly upward sloping best response functions. d. None of the above is a correct answer. 12. In a Bertrand duopoly with homogenous goods and uncertain marginal costs the symmetric Bayesian Nash equilibrium has:. a. All type of firms setting a price equal to marginal cost. b. Expected profits that are strictly positive. c. That the more firms in the industry lead to lower output levels in the industry. d. None of the above is a correct answer. 13. Suppose the markup or Lerner index at a symmetric Cournot-Nash equilibrium with n firms is L (n) = e where a is a demand parameter, c is the identical and symmetric marginal cost for all firms, a > c. This implies that: a. As n increases towards infinity the industry behaves as in perfect competition, ceteris…
Solve all this question......you will not solve all questions then I will give you down?? upvote...
From the bank of terms match the letter that corresponds to the appropriate concept/description. Bank of terms Letter A Perfect Bayesian Nash equilibrium Bayesian Nash equilibrium Nash equilibrium Competition à la Cournot Competition à la Bertrand В C E Herfindahl index F Perfect competition G Consumer urplus Lerner index H I Principal-agent model Natural monopoly Strategic complements Conjectural variations approach Strategic substitutes J K L M N Concept/description Competition in quantities Price taking behavior Index of maket power Write letter Measure of welfare Solution for a static game with incomplete information Competition in prices Measure of intensity of competition Manager and business owner work relationship Best response functions that slope upwards Estimation of market power
. What is the Nash equilibrium in this advertising war?a) Coke advertises; Pepsi does not advertise b) Pepsi advertises; Coke does not advertise c) neither of them advertises d) both of them advertise Explain the reasons for your answer? Was any other equilibrium position possible? advertise do not advertise pepsi-advertise coke profit=$50B coke profit =$20B PEPSI profit =$50B pepsi profit =$100B do not advertise coke profit =$100B coke profit =$80B pepsi profit =$20B PEPSI PROFIT =$80 B
There are two firms in the market (duopoly). These two firms are competingsimultaneously. The first firm chooses its output level (x) by predicting the second firm’soutput (y). Let c denote the total cost function c(x) = x and c(y) = y. Also, let’s assumethat the inverse demand function is p(Y) = 7 - Y where Y = x + y. (1) Obtain the reactionfunction of the first firm. (2) Find the equilibrium (output and profit of each firm) whentwo firms simultaneously compete
only typed solution