a-f all options are either yes/no Consider an industry composed of only two firms, each producing an identical product. Thetwo firms have identical constant marginal costs of production, zero fixed costs, and behaveas leader-follower (Stackelberg duopolists). Which of the following conditions will hold inequilibrium?a) at least one firm makes zero profitb) both firms make decisions at the sametimec) the firm that moves first will makelower profit than the other firmd) one of the firms chooses its price firste) the combined profit of Stackelbergduopolists is higher than that of Bertrandduopolistsf) the equilibrium price is greater than thequilibrium price under perfectcompetition but less than the equilibriurprice in a Cournot model of duopoly[Choose ][Choose ][Choose ][Choose ][Choose ]✓ [Choose ]noyes

Perfect competition is an ideal kind of market structure where all makers and buyers have full and…

ader-follower (Stackelberg duopolists). Which of the following conditions ibrium? least one firm makes zero profit th firms make decisions at the same e firm that moves first will make r profit than the other firm [Choose ] Choose ] [Choose ] > >

ader-follower (Stackelberg duopolists). Which of the following conditions ibrium? least one firm makes zero profit th firms make decisions at the same e firm that moves first will make r profit than the other firm [Choose ] Choose ] [Choose ] > >

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter15: Imperfect Competition

Section: Chapter Questions

Problem 15.3P

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Please answer fast please arjent help please ASAP answer options are yes/no a and f please are both
bok rint An oligopoly producing a homogeneous product is comprised of three firms that act like a cartel. Assume that these three firms have identical cost schedules. Assume also that if any one of these firms sets a price for the product, the other two firms charge the same price. As long as they all charge the same price they will share the market equally; and the quantity demanded of each will be the same. Below is the total-cost schedule of one of these firms and the demand schedule that confronts it when the other firms charge the same price as this firm. Complete the marginal-cost and marginal- revenue schedules facing the firm. erences Mc Graw Hill Output Total cost Marginal cost Price Quantity demanded Marginal revenue 0 1 23456 7 8 $0 180 300 480 720 1,020 1,380 1,800 2,280 Short Anewor LA JUL 26 $780 720 660 600 540 480 420 360 Toolbar navigation (a) What price would be charged, what output would be produced, and what profit would be made by this firm? (b) If the firms…
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1. Best responses in a Cournot Oligopoly Firm A and Firm B sell identical goods Total market demand for the good is: The inverse demand function is therefore 1 P(QM) = 780 -Q=780 -0.02222QM 45 QM is total market production (i.e., combined production of firm's A and B. That is: Q(P) = 35, 100- 45P 2M = A +QB As a result, the inverse demand curve for each firm is: P(QA, QB) = 780- -1/32₁-752 45 Unlike the example in class, the two firms have different costs. = 4000A TCA (QA) TCB (QB) = 260QB = 780 -0.022220A -0.02222QB a. Using the demand function and the cost functions above, what is firm A's profit function. b. Using the profit function above and assuming that firm B produces Qg, calculate what firm A's best response is to firm B’s decision to produce QB- Note: Firm A's best response should be a function of B
Two firms with differentiated products are competing in price. Firm A and B face thefollowing demand curves: Q_A = 70 − 2P_A + P_B and Q_B = 120 − 2P_B + P_Arespectively. Assume production is costless.a. Give equations for and graph each firm’s reaction curve.b. If both firms set their prices at the same time, what is the Nash equilibriumprice, quantity, and profit for each firm?c. Suppose A sets its price first and then B responds. What price and quantitydoes each firm set now? Is it advantageous to move first?d. Compare the profits from part b and c. Which firm benefits more from thesequential price choosing? (Please do b-d, thanks :))
Suppose that in the market for cell phone service the number of competitors has dwindled until D & C Romer Net and Spa T. Wireless have become the only providers left in the nation. Seeking to boost their profits, the two companies secretly agree to a coordinated increase in their prices for cell phone minutes. This practice is known as a Nash equilibrium. O tying. collusion. antitrust. predatory pricing.
There are two firms in the market (duopoly). These two firms are competingsimultaneously. The first firm chooses its output level (x) by predicting the second firm’soutput (y). Let c denote the total cost function c(x) = x and c(y) = y. Also, let’s assumethat the inverse demand function is p(Y) = 7 - Y where Y = x + y. (1) Obtain the reactionfunction of the first firm. (2) Find the equilibrium (output and profit of each firm) whentwo firms simultaneously compete
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10Two firms produce differentiated products. The demand for each firm’s product is as follows:  Demand for Firm 1: q1 = 20 – 2p1 + p2  Demand for Firm 2: q2 = 20 – 2p2 + p1 Both firms have the same cost function: c(q) = 5q. Firms compete by simultaneously and independently choosing their prices and then supplying enough to meet the demand they receive. Please compute the Nash equilibrium prices for these firms.
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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).