3) Assume that s = 3.(a) Find firm B’s profit function under the subsidy. (No work required.)(b) Find firm B’s best response function.(You may do this directly or by setting s to zero in yourexpressions from (1b).(c) Why don’t I need to ask you to solve for A’s best response?(d) Solve for the equilibrium outputs (q*A, q*b ).(e) Solve for the equilibrium price.(f) Solve for firm B profits.Can you please answer the last 3 questions All question are with regards to the following set up. There are two firms A and B. Firmscompete in a Cournot Duopoly in Karhide. They set quantities qA and qB. Inverse demand isP(9A + 9B) = 18 - 9A-9B and costs are C(q) = 3 * q for both firms. Firm B is a domestic firm(in Karhide,) and firm A is a foreign firm (from Orgoreyn.) The government of Karhide engagesin a strategic trade intervention by giving firm B a per unit subsidy of s. (That is, when firm Bproduces and sells q3 units, firm B receives a payment of s * qB from the government.)You must show your work at each step, unless the questions is followed by "No work required."

Given information Demand function P=18-qa-qb C=3q Firm B is domestic firm Firm A is foreign firm…

Answered: All question are with regards to the…

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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3) Assume that s = 3.
(a) Find firm B’s profit function under the subsidy. (No work required.)
(b) Find firm B’s best response function.(You may do this directly or by setting s to zero in your
expressions from (1b).
(c) Why don’t I need to ask you to solve for A’s best response?
(d) Solve for the equilibrium outputs (q*A, q*b ).
(e) Solve for the equilibrium price.
(f) Solve for firm B profits.

Can you please answer the last 3 questions

All question are with regards to the following set up. There are two firms A and B. Firms
compete in a Cournot Duopoly in Karhide. They set quantities qA and qB. Inverse demand is
P(9A + 9B) = 18 - 9A-9B and costs are C(q) = 3 * q for both firms. Firm B is a domestic firm
(in Karhide,) and firm A is a foreign firm (from Orgoreyn.) The government of Karhide engages
in a strategic trade intervention by giving firm B a per unit subsidy of s. (That is, when firm B
produces and sells q3 units, firm B receives a payment of s * qB from the government.)
You must show your work at each step, unless the questions is followed by "No work required."

Definition Video Definition Point where the demand and supply curves intersect. At the equilibrium price the quantity supplied of a good is equal to the quantity demanded. When the market is not in equilibrium, market surplus or market shortage occurs. The region that is above the price equilibrium indicates market surplus and the region below the price equilibrium indicates market shortage. Video

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