Assume the inverse demand function in a market is given by P(Q)=500−Qwhere Qis the total industry output, that is the sum of the output of all firms in the market.There are two firms (indexed by i = 1,2) who both have a cost of producing the good given byc(qi)=10∗qiThe two firms are competing in the Cournot manner, that is they choose their quantities simultaneously in order to maximize profits.What is the best response of firm 1 if firm 2 chooses an output level of 200? (input a whole number:) The best response function of firm 1 with respect to firm 2's quantity choice takes the form:q1(q2)=w∗(x−y∗q2−z)where (w,x,y,z) are parameters of the problem. Solve for this best response function and provide the product (w*x*y*z) in the next blank: What is the Nash Equilibrium quantity produced by firm 1?(round to the nearest whole number) Assume the inverse demand function in a market is given byP(Q) = 500 - Qwhereis the total industry output, that is the sum of the output of all firms in the market.There are two firms (indexed by i = 1,2) who both have a cost of producing the goodgiven byc(qi) = 10 * qiThe two firms are competing in the Cournot manner, that is they choose theirquantities simultaneously in order to maximize profits.What is the best response of firm 1 if firm 2 chooses an output level of 200? (input awhole number:)The best response function of firm 1 with respect to firm 2's quantity choice takesthe form:91 (92) = w * (x − y * q2 z)where (w,x,y,z) are parameters of the problem. Solve for this best response functionand provide the product (w*x*y*z) in the next blank:What is the Nash Equilibrium quantity produced by firm 1?(round to the nearest whole number)

Market Demand function : P = 500 - Q => P = 500 - (q1 + q2 ) Where , Q = Total Quantity for two…

Answered: Assume the inverse demand function in a…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Assume the inverse demand function in a market is given by P ( Q ) = 500 − Q where Q is the total industry output, that is the sum of the output of all firms in the market. There are two firms (indexed by i = 1,2) who both have a cost of producing the good given by c ( q i ) = 10 ∗ q i The two firms are competing in the Cournot manner, that is they choose their quantities simultaneously in order to maximize profits. What is the best response of firm 1 if firm 2 chooses an output level of 200? (input a whole number:) The best response function of firm 1 with respect to firm 2's quantity choice takes the form: q 1 ( q 2 ) = w ∗ ( x − y ∗ q 2 − z ) where (w,x,y,z) are parameters of the problem. Solve for this best response function and provide the product (w*x*y*z) in the next blank: What is the Nash Equilibrium quantity produced by firm 1? (round to the nearest whole number)

Assume the inverse demand function in a market is given by
P(Q) = 500 - Q
where
is the total industry output, that is the sum of the output of all firms in the market.
There are two firms (indexed by i = 1,2) who both have a cost of producing the good
given by
c(qi) = 10 * qi
The two firms are competing in the Cournot manner, that is they choose their
quantities simultaneously in order to maximize profits.
What is the best response of firm 1 if firm 2 chooses an output level of 200? (input a
whole number:)
The best response function of firm 1 with respect to firm 2's quantity choice takes
the form:
91 (92) = w * (x − y * q2 z)
where (w,x,y,z) are parameters of the problem. Solve for this best response function
and provide the product (w*x*y*z) in the next blank:
What is the Nash Equilibrium quantity produced by firm 1?
(round to the nearest whole number)

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