In a Nash - Cournot equilibrium, does an oligopolistic firm produce at less than full capacity, full capacity, or more than full capacity? Explain.
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- How do pricing strategies vary across markets that are characterized bymonopolistic, oligopolistic, monopolistic competition, and purecompetition?In an oligopolistic industry there are only a few firms. Is this statement correct? Explain.Assume a Nash-Cournot equilibrium. How much output does firm 1 produce? Assume a Nash-Cournot equilibrium and no fixed cost. How much profit does firm 2 make? Now assume a collusive equilibrium. What is firm 1's output?
- Which of the following best represents the pricing behavior of firms in an oligopolistic market? A) Stay*Put Clothespins takes the market price of clothespins as given and produces the amount of clothespins where marginal revenue equals marginal cost. B) Unykdrugs, Inc. produces where its marginal revenue is equal to its marginal cost and prices on its downward-sloping demand curve such that the market for its product clears, knowing it will not face competition due to patents it holds on its products. C) Teen Angle Hardware looks for a niche to sell its hardware products to teens but finds it difficult to earn anything more than normal profit due to other hardware stores also looking for niches. D) Looking Over Your Shoulder Handbag Co. chooses the price it charges by estimating what its rivals are most likely to do and then taking their responses into consideration.What are the distinguishing features of oligopoly? Why are breakfast cereals made by firms in oligopoly? Why isn't there monopolistic competition in that industry? Business Week reported that Energizer is gaining market share against competitor Duracell and its profit is raising despite the sharp rise in the price of zinc, a key battery ingredient. In what type of market are batteries sold?Deviating from the collusive outcome Please check the image there is a graph Mays and McCovey are beer-brewing companies that operate in a duopoly (two-firm oligopoly). The daily marginal cost (MC) of producing a can of beer is constant and equals $0.60 per can. Assume that neither firm had any startup costs, so marginal cost equals average total cost (ATC) for each firm. Suppose that Mays and McCovey form a cartel, and the firms divide the output evenly. (Note: This is only for convenience; nothing in this model requires that the two companies must equally share the output.) Place the black point (plus symbol) on the following graph to indicate the profit-maximizing price and combined quantity of output if Mays and McCovey choose to work together. When they act as a profit-maximizing cartel, each company will produce cans $ and charge $ per can. Given this information, each firm earns a daily profit of $ , so the daily total industry…
- Compare the industry output and price in a Cournot versus a competitive equilibrium. Do firms earn economic profits in the Cournot model? Does economic theory predict that firms always earn economic profits in oligopolistic industries? Explain. What does the empirical evidence indicate?New, small firms often have trouble competing in oligopolistic industries because they cannot achieve the economies of scale the established, large firms enjoy. is this true or false1.6. Consider the Cournot duopoly model where inverse demand is P(Q) = a - Q but firms have asymmetric marginal costs: c₁ for firm 1 and c2 for firm 2. What is the Nash equilibrium if 0 a+c₁?