Consider a Cournot duopoly with two firms that have the same cost function c(y ) =3y (the marginal cost is 3). The demand in the market is given by p(y )=10-2y. What will be the price in this market? Answer: 5.33
Consider a Cournot duopoly with two firms that have the same cost function c(y ) =3y (the marginal cost is 3). The demand in the market is given by p(y )=10-2y. What will be the price in this market? Answer: 5.33
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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6
![GIVE A DETAILED ANSWER TO EACH
QUESTION
Consider a Cournot duopoly with two firms that have the same cost
function c(y ) =3y (the marginal cost is 3). The demand in the market
is given by p(y )=10-2y. What will be the price in this market?
Answer:
5.33
Consider a Stackelberg model with two firms. Each firm has a cost
function c(y ) =4y (the marginal cost is 4). The demand in the market
is given by p(y )=17-6y. How much will the Stackelberg leader
produce?
Answer:
1.42
A firm has two plants with marginal costs: MC1(y )=3y+2 and MC2(y )=8y. Assuming that the firm is a price
taker, at what price will the firm produce 27 units of output?
Answer:
60.3636](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff12f66ad-f5f7-4ea8-a18a-0cfe5c26a701%2F387ceaeb-54ae-48b1-993a-715e5ed0e477%2Fydycac_processed.jpeg&w=3840&q=75)
Transcribed Image Text:GIVE A DETAILED ANSWER TO EACH
QUESTION
Consider a Cournot duopoly with two firms that have the same cost
function c(y ) =3y (the marginal cost is 3). The demand in the market
is given by p(y )=10-2y. What will be the price in this market?
Answer:
5.33
Consider a Stackelberg model with two firms. Each firm has a cost
function c(y ) =4y (the marginal cost is 4). The demand in the market
is given by p(y )=17-6y. How much will the Stackelberg leader
produce?
Answer:
1.42
A firm has two plants with marginal costs: MC1(y )=3y+2 and MC2(y )=8y. Assuming that the firm is a price
taker, at what price will the firm produce 27 units of output?
Answer:
60.3636
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