13) Two identical firms are engaged in Cournot competition, with cost functions TCA(QA) = 30 QA and TCB(QB) = 30 QB. The market demand is given by P = 480 –3Q. a) Plot the best response functions and report the Cournot-Nash equilibrium quantities, price and profits. b) What are the prices, quantities, and profits for the firms if they decide to collude and share profits equally? c) Show that firms have an incentive the deviate from the collusive outcome. d) Find the Stackelberg equilibrium if A leads and B follows. e) Show the equilibria in the previous parts on the inverse demand function. Calculate and identify consumer surplus and deadweight loss in each equilibrium. If you can only answer a limited amount of questions, please answer d and e :)
13) Two identical firms are engaged in Cournot competition, with cost functions
TCA(QA) = 30 QA and TCB(QB) = 30 QB. The market demand is given by P = 480 –3Q.
a) Plot the best response functions and report the Cournot-Nash
b) What are the prices, quantities, and profits for the firms if they decide to collude and share profits equally?
c) Show that firms have an incentive the deviate from the collusive outcome.
d) Find the Stackelberg equilibrium if A leads and B follows.
e) Show the equilibria in the previous parts on the inverse demand function. Calculate and identify consumer
surplus and
If you can only answer a limited amount of questions, please answer d and e :)
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