8. There are several identical firms in a market. The cost function of firm i is q? +q,where q; is the output of this firm, and q is the sum of other firms' output. The market5demand is q(p) =-1p. We assume that all firms are Cournot oligopolists, and themarket is free entry. In equilibrium the number of firms in the market isА. 5В. 4С.3D. 2

Total revenue determines the amount earned from the quantity produced.Economic costs involve not…

8. There are several identical firms in a market. The cost function of firm i is q? +q, where qi is the output of this firm, and q is the sum of other firms' output. The market demand is q(p) = - p. We assume that all firms are Cournot oligopolists, and the market is free entry. In equilibrium the number of firms in the market is A. 5 C. 3 D. 2 B. 4

8. There are several identical firms in a market. The cost function of firm i is q? +q, where qi is the output of this firm, and q is the sum of other firms' output. The market demand is q(p) = - p. We assume that all firms are Cournot oligopolists, and the market is free entry. In equilibrium the number of firms in the market is A. 5 C. 3 D. 2 B. 4

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Compare the quantity and price of an oligopoly tothose of a perfectly competitive market.
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3. Reuben and Simeon are duopolists producing jeans in a differentiated goods market. The market demand for Reuben's jeans is y₁ = 75 − P₁ + P2, while the market demand for 1 1 Simeon's jeans is y₂ = 75 − P2 + ₂P₁. Reuben's cost function is C₁(y₁) = 75y₁ while Simeon's cost function is C₂ (y₂) = 75y2. a) Calculate the Bertrand equilibrium in this market. Indicate each firm's price, output level, and profits. (Answer: p₁ = 100 USD, y₁ = 25 units) b) Find prices and output levels that would maximize joint profits, and calculate the maximum joint profits. c) Draw a payoff matrix using the results from a) and b) and determine the Nash equilibrium.
According to the kinked demand curve theory of oligopoly each firm thinks its demand curve at prices above the existing price is a. less elastic than at prices below the exisiting price since price increases will be matched. b. more elastic than at prices below the exisiting price since price increases will be matched. c. less elastic than at prices below the exisiting price since price increases will not be matched. d. more elastic than at prices below the exisiting price since price increases will not be matched.
Assume that the market for oil is made up of two firms: Exxon Mobil and Chevron. Also assume that New England has dozens of breweries and each of these make beers with different tastes, colors, and aromas. Which of the following statements is true? The market structure for oil is an oligopoly, and the one for beer is monopolistic competition. The market structure for oil is monopolistic competition, and the one for beer is an oligopoly. The market structure for both oil and beer is an oligopoly. The market structure for both oil and beer is monopolistic competition.
1. which compete in quantities (Cournot -Nash equilibrium = C) 2. which compete in quantities with the first firm (the Leader) choosing the output first (Stackelberg competition = S). 3. which collude and choose quantities in order to maximize the joint profits (behave like two plants of a multiplant monopoly = M).
8. Two firms, the only firms in the market, sell the same product and have the same marginal cost. They realise they would be better off if they didn't compete with each other. They enter an alternating offers bargaining game to decide how they will divide the monopoly profit, n. They have three periods to come to an agreement. If no agreement is reached after three periods, the firms will compete simultaneously in prices. The firms toss a coin to decide who makes the first offer in the bargaining game. Firm 1 wins and decides to go first. Each firm has a discount factor o. a) Draw the game tree. b) What is the subgame perfect equilibrium when o = 0.5? c) What is the equilibrium payoff for each firm? d) Was Firm 1 wise to opt to make the first offer? Explain your answer.
Hi, could you please help me solve this? I didn't understand where the numbers come from in the solutions. Could you explain step by step how to solve this? P.S. The textbook is called "Economics" by Krugman & Wells. Chapter 14, Problem 4.
2. Two firms competing on output choice in an oligopolistic market face the following inverse market demand curve P = 100 – 1.5Q where Q = q1 + 92 Each firm faces a total cost function given as TC, = 6q1 TC, = 3q2 Assume the firms are Cournot competitors and determine the equilibrium quantity, price and profit for each firm.
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Oligopolies An oligopoly is a market structure in which only a few sellers produce similar or identical products. Oligopolies are price-setters and can collude to behave like a monopolist. 1. Explain how you can distinguish a firm in an oligopolistic market from one in a monopolistic competitive market. Provide examples to illustrate.
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