[Q: 14-4163245] Consider a duopolistic market with differentiated products. The cost functions for the two firms are estimated to be C(q, ) = 40q, and C(q2) = 2092, while the direct demand%3Dfunctions are estimated to be as follows:Firm 1: q, (P1P2) = 5602 – 2p, + 1P2.Firm 2: 92 (P1,P2) = 5602 - 2p2 + 1P1.where91is Firm 1's output, q, is Firm 2's output, p, is Firm 1's price, and p, is Firm 2's price.Using the information above, find the equilibrium prices and quantities under the Bertrand model. (Enter all answers rounded to two decimal places but do not round intermediate values).P2: 1883.33.: 3726.67).P1: 1891.3391: 3702.67'.92:If the products in this market were instead undifferentiated, what would the equilibrium quantity for Firm 1 be if you again applied the Bertrand model?A. Firm 1 would produce the same quantity found above because product differentiation is not a factor in the Bertrand model.B. Firm 1 would not produce because at the equilibrium market price, Firm 1 would apply the shut-down rule.C. Firm 1 would produce half of the total market quantity because the two firms' products would be viewed as perfect substitutes and the firms would split the production equally.D. There is not enough information to answer this question.

In the bertrand competition, firms competes in basis of price.

= 5602 - 2p, + 1p2. P2) = 5602 – 2p2 + 1p,. %3D irm 1's output, q, is Firm 2's output, p, is Firm 1's price, and p2 is Firm 2's price. ormation above, find the equilibrium prices and quantities under the Bertrand model. (Enter all answers rounded to two decimal places but do r • P2: 1883.33. • 42: 3726.67. s in this market were instead undifferentiated, what would the equilibrium quantity for Firm 1 be if you again applied the Bertrand model? 1 would produce the same quantity found above because product differentiation is not a factor in the Bertrand model. 1 would not produce because at the equilibrium market price, Firm 1 would apply the shut-down rule.

= 5602 - 2p, + 1p2. P2) = 5602 – 2p2 + 1p,. %3D irm 1's output, q, is Firm 2's output, p, is Firm 1's price, and p2 is Firm 2's price. ormation above, find the equilibrium prices and quantities under the Bertrand model. (Enter all answers rounded to two decimal places but do r • P2: 1883.33. • 42: 3726.67. s in this market were instead undifferentiated, what would the equilibrium quantity for Firm 1 be if you again applied the Bertrand model? 1 would produce the same quantity found above because product differentiation is not a factor in the Bertrand model. 1 would not produce because at the equilibrium market price, Firm 1 would apply the shut-down rule.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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