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

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
icon
Related questions
Question

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
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
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Nash Equilibrium
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.
Recommended textbooks for you
ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
Economics
ISBN:
9780190931919
Author:
NEWNAN
Publisher:
Oxford University Press
Principles of Economics (12th Edition)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education