3) Suppose the duopolists producing homogeneous products face the following market demand curve P=80-Q where Q=Q₁ +Q₂ TC₁ = 60, and TC₂ = 80₁ i) Suppose the duopolists compete by simultaneously choosing output, what price will each firm choose? How much will each firm produce? And how much profit will each firm make? ii) Suppose the firms now move sequentially with firm 1 moving first, what price will each firm choose? How much will each firm produce? And how much profit will each firm make?
3) Suppose the duopolists producing homogeneous products face the following market demand curve P=80-Q where Q=Q₁ +Q₂ TC₁ = 60, and TC₂ = 80₁ i) Suppose the duopolists compete by simultaneously choosing output, what price will each firm choose? How much will each firm produce? And how much profit will each firm make? ii) Suppose the firms now move sequentially with firm 1 moving first, what price will each firm choose? How much will each firm produce? And how much profit will each firm make?
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter13: best-practice Tactics: Game Theory
Section: Chapter Questions
Problem 1E
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![3) Suppose the duopolists producing homogeneous products face the following market
demand curve
P=80-Q where Q=Q₁ +Q₂
TC₁ = 60, and TC₂ = 80₁
i)
Suppose the duopolists compete by simultaneously choosing output, what price will
each firm choose? How much will each firm produce? And how much profit will
each firm make?
ii)
Suppose the firms now move sequentially with firm 1 moving first, what price will
each firm choose? How much will each firm produce? And how much profit will
each firm make?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4ccdde4c-3b9f-49bf-8847-3f7bcc3ab185%2Ff901fef2-794e-4eb6-bee5-fae933a29f1f%2F5o3h42_processed.jpeg&w=3840&q=75)
Transcribed Image Text:3) Suppose the duopolists producing homogeneous products face the following market
demand curve
P=80-Q where Q=Q₁ +Q₂
TC₁ = 60, and TC₂ = 80₁
i)
Suppose the duopolists compete by simultaneously choosing output, what price will
each firm choose? How much will each firm produce? And how much profit will
each firm make?
ii)
Suppose the firms now move sequentially with firm 1 moving first, what price will
each firm choose? How much will each firm produce? And how much profit will
each firm make?
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