An Australian firm and a US firm produce a homogeneous good that is sold only in Japan. The marginal cost of producing the good is constant and equal to 30 in both countries. The demand curve for the good in Japan is: P = 120-Q where Q = QA +QUS represents the sum of the quantities produced by the Australian and the US firms, respectively. (b) Assume the Australian firm can commit to an output before the US firm. Solve for the Stackelberg Equilibrium price, sales and profits of each firm in Japan. Price profit ALIS? ,output_US2 profit_US2 ,output_AUS2

An Australian firm and a US firm produce a homogeneous good that is sold only in Japan. The marginal cost of producing the good is constant and equal to 30 in both countries. The demand curve for the good in Japan is: P = 120-Q where Q = QA +QUS represents the sum of the quantities produced by the Australian and the US firms, respectively. (b) Assume the Australian firm can commit to an output before the US firm. Solve for the Stackelberg Equilibrium price, sales and profits of each firm in Japan. Price profit ALIS? ,output_US2 profit_US2 ,output_AUS2

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

An Australian firm and a US firm
produce a homogeneous good that is
sold only in Japan. The marginal cost of
producing the good is constant and
equal to 30 in both countries. The
demand curve for the good in Japan is:
P = 120-Q where Q = QA +QUS
represents the sum of the quantities.
produced by the Australian and the US
firms, respectively.
(b) Assume the Australian firm can commit to an output before the US firm. Solve for the Stackelberg Equilibrium price, sales and
profits of each firm in Japan.
Price
profit AUS2
,output_US2
profit_US2
output_AUS2

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