-12345678910Consider a market in which three firms compete as quantity setters (i.e. firms are engaged in Cournot competition), and the market demand curve is given by Q=6,000-10P. All firms have constant marginal cost equal to 100. In equilibrium, quantity supplied by each firm and the price are:Q-5000 and P = 100Q=1000 and P = 200Q=2500 and P = 225Q=1250 and P = 225WidgetWidget is a commodity that is traded in a perfectly competitive globalmarket that consists of many small price-taking firms. The firms fall in threecategories with the following characteristics:Number offirmsType 1Type 2Type 310010050Capacity offirm's plant(units peryear)120 units100 units100 unitsAVC ($ perunit)203030Fixed costper unit atfull capacity($/unit)253550• Assume that each firm's AVC is constant up to the capacity of its plant.Further, assume that once built, a firm's plant has zero redeploymentvalue. Finally, assume that a typical entrant has a cost structureidentical to the Type 1 firms and that there are many potentialentrants. Investment cost of a Type 1 firm is 15000 and annual interestrate is 8%.• The demand for widgets is Q-35000-200P, where P is $ per unit andQ is measured in units per year.The short-run equilibrium price in the world widgets market isType your answer...The short-run equilibrium quantity in the world widgets market isType your answer...D-1In the short-run equilibrium:The combined equilibrium quantity of widgets supplied by Type 1 firms is

Total revenue is the product of price and quantity. So , TR = P × Q Marginal revenue is the revenue…

Consider a market in which three firms compete as quantity setters (i.e. firms are engaged in Cournot competition), and the market demand curve is given by Q= 6,000-10P. All firms have constant marginal cost equal to 100. In equilibrium, quantity supplied by each firm and the price are: Q-5000 and P-100 Q-1000 and P-200 Q=2500 and P = 225 Q=1250 and P = 225

Consider a market in which three firms compete as quantity setters (i.e. firms are engaged in Cournot competition), and the market demand curve is given by Q= 6,000-10P. All firms have constant marginal cost equal to 100. In equilibrium, quantity supplied by each firm and the price are: Q-5000 and P-100 Q-1000 and P-200 Q=2500 and P = 225 Q=1250 and P = 225

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Q3. There are two firms selling differentiated products. Firm A faces the following demand for his product: e, = 20 – -P, + -P, 2. Firm B faces the following demand: 1 P. +-P, 2. 0, = 220- Assume that the marginal cost is zero both for firm A and firm B. What are the equilibrium prices of a simultaneous price competition? What would the equilibrium prices be if A is the leader and B is the follower?
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Consider the weekly market for gyros in a popular neighborhood close to campus. Suppose this market is operating in long-run competitive equilibrium with many gyro vendors in the neighborhood, each offering basically the same gyros. Due to the structure of the market, the vendors act as price takers and each individual vendor has no market power.
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