A small town has two bakeries, Acme and Fat Apple. Acme's marginal cost to make a loaf of bread is $1 and Fat Apple's marginal cost is $2. Acme's demand function isgiven as Q₁ = 14 - P₁ -0.5P2 and Fat Apple's demand function is Q₂ = 19 -0.5P₁ - P₂ where P₁ (P₂) is Acme (Fat Apple)'s price in dollars per loaf of break and Q1 (Q2)is measured in thousand loaves of Amce (Fat Apple)'s bread (respectively). What is Acme's profit function?OOP₂² +15P2-0.5P1 P2 + 0.5P₁ - 14.-P₁² + 15P₁ - 0.5P₁P2 + 0.5P2 - 14.-P₁²+10P1 -0.5P1 P2 +0.5P2O+ P₁²-15P1 +0.5P1 P2 -0.5P2 + 14.

Acme's marginal cost to making a loaf of bread is $1.Acme's demand function: The profit function is…

A small town has two bakeries, Acme and Fat Apple. Acme's marginal cost to make a loaf of bread is $1 and Fat Apple's marginal cost is $2. Acme's demand function is given as Q₁ = 14 - P₁ -0.5P₂ and Fat Apple's demand function is Q₂ = 19 -0.5P₁ - P2 where P₁ (P₂) is Acme (Fat Apple)'s price in dollars per loaf of break and Q₁ (Q₂) is measured in thousand loaves of Amce (Fat Apple)'s bread (respectively). What is Acme's profit function? O O - P₂² +15P2-0.5P1 P2 +0.5P₁ - 14. -P₁²+15P₁ -0.5P₁P2 +0.5P2 - 14. -P₁²+10P1 -0.5P₁ P2+ 0.5P2 O + P₁²-15P₁ +0.5P1 P2 -0.5P2 + 14.

A small town has two bakeries, Acme and Fat Apple. Acme's marginal cost to make a loaf of bread is $1 and Fat Apple's marginal cost is $2. Acme's demand function is given as Q₁ = 14 - P₁ -0.5P₂ and Fat Apple's demand function is Q₂ = 19 -0.5P₁ - P2 where P₁ (P₂) is Acme (Fat Apple)'s price in dollars per loaf of break and Q₁ (Q₂) is measured in thousand loaves of Amce (Fat Apple)'s bread (respectively). What is Acme's profit function? O O - P₂² +15P2-0.5P1 P2 +0.5P₁ - 14. -P₁²+15P₁ -0.5P₁P2 +0.5P2 - 14. -P₁²+10P1 -0.5P₁ P2+ 0.5P2 O + P₁²-15P₁ +0.5P1 P2 -0.5P2 + 14.

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter25: Monopoly

Section: Chapter Questions

Problem 9E

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A small town has two bakeries, Acme and Fat Apple. Acme's marginal cost to make loaf of bread is $1 and Fat Apple's marginal cost is $2. Acme's demand function is given as Q₁ = 14 - P₁ - 0.5P2 and Fat Apple's demand function is Q2 = 19 -0.5P1 - P2 where P₁ (P2) is Acme (Fat Apple)'s price in dollars per loaf of break and Q₁ (Q2) is measured in thousand loaves of Amce (Fat Apple)'s bread (respectively). Find Nash equilibrium prices. O O O P1 = 10.2 and P2 = 9.2. P1 = 5.2 and P2 = 9.2. P1 = 4.4 and P2 = 8.2. P1 = 5.5 and P2 = 9.
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