Consider a market with five quantity-setting firms called 1, 2, 3, 4, and 5. The firms face a market demand function of P = 360 – Q and thus MR = 360 – 2Qi – Q-i. Each firm initially has the cost function C(Qi) = 1,000 + 60Qi and thus MCi = 60. The firms choose their quantities simultaneously, as in Cournot competition 1. What is the equilibrium quantity of each firm when there is non-cooperative behavior among all five firms? 2. What is the market price when there is non-cooperative behavior among all five firms? 3.What is the profit of each firm when there is non-cooperative behavior among all five firms? 4. What is the equilibrium quantity of each unmerged firm after firms 4 and 5 merge and take the cost changes proposed in part 2. 5. What is the equilibrium quantity of the merged firm after firms 4 and 5 merge and take the cost changes proposed in part 2? 6. What is the market price after firms 4 and 5 merge? 7. What is the profit of each unmerged firm after firms 4 and 5 merge? 8. What is the profit of the merged firm after firms 4 and 5 merge? 9 .Given that firms 4 and 5 have merged as described, do firms 2 and 3 want to merge and take the same cost changes as 4 and 5? y/n
Consider a market with five quantity-setting firms called 1, 2, 3, 4, and 5. The firms face a market demand
1. What is the equilibrium quantity of each firm when there is non-cooperative behavior among all five firms?
2. What is the market price when there is non-cooperative behavior among all five firms?
3.What is the profit of each firm when there is non-cooperative behavior among all five firms?
4. What is the equilibrium quantity of each unmerged firm after firms 4 and 5 merge and take the cost changes proposed in part 2.
5. What is the equilibrium quantity of the merged firm after firms 4 and 5 merge and take the cost changes proposed in part 2?
6. What is the market price after firms 4 and 5 merge?
7. What is the profit of each unmerged firm after firms 4 and 5 merge?
8. What is the profit of the merged firm after firms 4 and 5 merge?
9 .Given that firms 4 and 5 have merged as described, do firms 2 and 3 want to merge and take the same cost changes as 4 and 5? y/n
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