16:04AM •ll l 16%!eclass.uonbi.ac.ke/mod/qu2If a duopolist has a linear demand curve of theform Q=400 – P. Assuming each firm has totalcost (TC=3000+100Q). Calculate the profit-maximizing price-quantity combinations usingthe following four oligopoly pricing models listedbelow demonstrating that:а.Under the Cournot model, both firms willearn same level of profit and determine industryprofit and explain why this is would be the case.b. Under the Cartel model each firm earns ahigher profit than under Cournot.Under the Quasi-competitive model, thefirm will make a loss equivalent to fixed cost.С.d. Under the Stackelberg's model the leaderwill earn more than twice the profit of thefollower and that total industry profits will belower than under both Cournot and Cartelmodels. Explain why this is would be the case.I+IIII!!!

Cournot competition is an associate economic model during which competitive corporations opt for an…

If a duopolist has a linear demand curve of the form Q=400 – P. Assuming each firm has total cost (TC=3000+100Q). Calculate the profit- maximizing price-quantity combinations using the following four oligopoly pricing models listed below demonstrating that:

If a duopolist has a linear demand curve of the form Q=400 – P. Assuming each firm has total cost (TC=3000+100Q). Calculate the profit- maximizing price-quantity combinations using the following four oligopoly pricing models listed below demonstrating that:

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter13: best-practice Tactics: Game Theory

Section: Chapter Questions

Problem 3E

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Question

16:04
AM •
ll l 16%!
eclass.uonbi.ac.ke/mod/qu
2
If a duopolist has a linear demand curve of the
form Q=400 – P. Assuming each firm has total
cost (TC=3000+100Q). Calculate the profit-
maximizing price-quantity combinations using
the following four oligopoly pricing models listed
below demonstrating that:
а.
Under the Cournot model, both firms will
earn same level of profit and determine industry
profit and explain why this is would be the case.
b. Under the Cartel model each firm earns a
higher profit than under Cournot.
Under the Quasi-competitive model, the
firm will make a loss equivalent to fixed cost.
С.
d. Under the Stackelberg's model the leader
will earn more than twice the profit of the
follower and that total industry profits will be
lower than under both Cournot and Cartel
models. Explain why this is would be the case.
I
+
II
II
!!!

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Economics How would the Coumot equilibrium change in the airine example if American's marginal cost were $100 and United's were $2007 The demand the duopoly quantity-setting firms face is Q- 339 -p with an inverse demand function of p- 339-19A1qu- where qa is the quantity produced by American and qu is the quantity produced by United. The Cournot-Nash equilibrium occurs where qa equals and qu equals (enter numeric responses using integers)