Please no written by hand and no emage 3. Oligopoly Consider a small town that has only two Sushi restaurants, A and B. Suppose that it costs$2 to make each sushi (for each store) and that the relation between sales in each month (q, measuredin thousands) and price (p, measured in dollars) for each firm is1qi = 24 - Pi + Pj.(a) What is each store's monthly profit as a function of PA and PÅ?(b) What are the Nash equilibrium prices, quantities, and profits for A and B?(c) Suppose that the two firms work together and collusively choose a joint best price pc. Whatsingle price do they choose to maximize their joint profits?Now consider the two restaurants, C and D, engaging in Cournot competition in a different town.Their inverse demands are given as p(Q) = 40 - 5Q where Q = 9₁ +92. Costs are c₁(9₁) = 109₁ and91C₂ (92) = 2q2 + 2q²/2(d) Find the Nash Equilibrium quantities for each firm.(e) Calculate profit for each firm.|

qi = 24 - pi + 0.5pj Cost of producing each sushi = 2Therefore , Demand function of A : qa = 24 -…

Oligopoly Consider a small town that has only two Sushi restaurants, A and B. Suppose that it costs $2 to make each sushi (for each store) and that the relation between sales in each month (q, measured in thousands) and price (p, measured in dollars) for each firm is 1 di = 24-pi + Pj. (a) What is each store's monthly profit as a function of PA and PB? (b) What are the Nash equilibrium prices, quantities, and profits for A and B?

Oligopoly Consider a small town that has only two Sushi restaurants, A and B. Suppose that it costs $2 to make each sushi (for each store) and that the relation between sales in each month (q, measured in thousands) and price (p, measured in dollars) for each firm is 1 di = 24-pi + Pj. (a) What is each store's monthly profit as a function of PA and PB? (b) What are the Nash equilibrium prices, quantities, and profits for A and B?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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