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Cournot competition: P=200-Q (hint: Q is industry output), both firms have constant MC=5. What are the Nash Equilibrium price and quantity for both firms

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter15: Oligopoly And Strategic Behavior

Section: Chapter Questions

Problem 6P

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Cournot competition: P=200-Q (hint: Q is industry output), both firms have constant MC=5. What are the Nash Equilibrium price and quantity for both firms? Please show all steps

Definition Video Definition Point where the demand and supply curves intersect. At the equilibrium price the quantity supplied of a good is equal to the quantity demanded. When the market is not in equilibrium, market surplus or market shortage occurs. The region that is above the price equilibrium indicates market surplus and the region below the price equilibrium indicates market shortage. Video

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**Practice** Consider a market with three firms. Each firm has a different cost function. We assume C1(q1) = 7q1, C2(q2) = q2 + 1, and C3(q3) = 3q3.
10Two firms produce differentiated products. The demand for each firm’s product is as follows:  Demand for Firm 1: q1 = 20 – 2p1 + p2  Demand for Firm 2: q2 = 20 – 2p2 + p1 Both firms have the same cost function: c(q) = 5q. Firms compete by simultaneously and independently choosing their prices and then supplying enough to meet the demand they receive. Please compute the Nash equilibrium prices for these firms.
I need help with c and d
I NEED HELP WITH A AND B
I need help with a and b
5
QUESTION 10 Suppose there are two firms that produce an identical product. The demand curve for the product is given by P = 62 - Q where Q is the total quantity produced by the two firms. Both firms choose their individual quantities qı20 and q22 0 simultaneously. Each firm has a marginal cost of 37. What is the market price when both firms produce the quantities in the unique Nash equilibrium? Give your answer as a number to two decimal places.
Solve please
6.
The demand for a product is Q = a - P/2. If there are 4 firms in an industry and marginal cost is MC = 20, then the price in Nash equilibrium is P = 56. What is a?
Consider the following Cournot model. • The inverse demand function is given by p = 30 –Q, where Q qi + q2. Firm 1's marginal cost is $6 (c1 = 6). Firm 2 uses a new technology so that its marginal cost is $3 (c2 = 3). There is no fixed cost. %3D The two firms choose their quantities simultaneously and compete only once. (So it's a one-shot simultaneous game.)
1. The market (inverse) demand function for a homogeneous good is P(Q) = 10 - Q. There are two firms: firm 1 has a constant marginal cost of 2 for producing each unit of the good, and firm 2 has a constant marginal cost of 1. The two firms compete by setting their quantities of production, and the price of the good is determined by the market demand function given the total quantity. a. Calculate the Nash equilibrium in this game and the corresponding market price when firms simultaneously choose quantities. b. Now suppose firml moves earlier than firm 2 and firm 2 observes firm 1 quantity choice before choosing its quantity find optimal choices of firm 1 and firm 2.