Output is homogenous and the demand curve isP = 448 - Q. There are two firms with identical%3Dcosts given by C = q2 i where qi is theproduction of firm i.The marginal cost of firm i is Mci(qi) = 2qi .(a) Find the Cournot equilibrium firm outputs. (b)

As it is given to us that P=448-Q C=Qi^2 MC=2Qi

Output is homogenous and the demand curve P = 448 - Q. There are two firms with identica %3D costs given by C = q2 i where qi is the %3D production of firm i. The marginal cost of firm i is MCi(qi) = 2qi . (a) Find the Cournot equilibrium firm outputs.

Output is homogenous and the demand curve P = 448 - Q. There are two firms with identica %3D costs given by C = q2 i where qi is the %3D production of firm i. The marginal cost of firm i is MCi(qi) = 2qi . (a) Find the Cournot equilibrium firm outputs.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

**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.
Hi! Can you help me with the question below? Northside Social (NS) sells cups of coffee and amazing breakfast sandwiches. The current price of a cup of coffee is $3.00 and the current price of an amazing breakfast sandwich is $8.00. At those prices, NS sells 1000 cups of coffee and 200 breakfast sandwiches daily. NS faces a constant marginal cost for each cup of coffee of 50 cents and the constant marginal cost of breakfast sandwiches is $2. NS increases the price of coffee 5%, to $3.15. After the price increase, NS sells 900 cups of coffee, a decrease of 10% in cups of coffee. Demand for coffee at NS at this price interval is best described as:A) ElasticB) InelasticC) Unitary ElasticD) Perfectly Elastic
Question Figure 7.11 depicts the demand curve for Beautiful Cars, together with the marginal cost and isoprofit curves. At point E, the quantity-price combination is (Q", P*) = (32, 5,440) and the profit is $63,360. Suppose that the firm chooses instead to produce Q = 32 cars and sets the price at P = $5,400. Which of the following statements is correct? 10.000 L000 Marginal cast seprof curve eprafit carve $30,000 av 0 Denand curve 100 120 Quantity of cars, Q O The profit is reduced to $62.080. The average cost of production is $3.400. O The profit remains the same at S63.360. O The firm is unable to scll all the cars. 5) asao peudeu'a
The Canadian retail market for roasted whole coffee beans is dominated by two firms: Tim Hortons (T) and Kicking Horse (K). The market demand function is given by P(Q) = 64 – 0.5Q. Assume it is possible to produce partial units of output. • Kicking Horse's marginal cost for each kg of roasted coffee beans is $3. • Tim Horton's marginal cost for each kg of roasted coffee beans is $5 (although they've been around longer than Kicking Horse, they've only recently expanded their product line for consumers to brew their own coffee at home). What is the Cournot market equilibrium (P and Q)?
Consider an industry with two firms producing similar products. Each firm's total cost (in dollars) is given below. Acme Manufacturing: TC= 100+ 3Q Generic Industries: TC-500+3Q When each firm is producing the same quantity, Acme's average total cost is
help
The next three problems are from Unit 10. You are provided with a pair of demand and cost functions. P=20,000-15.60 TC = 400,000 + 4640 Q + 100 Use the above functions and derive the maximum profits for the firm: Optimal Q = Optimal P = Optimal TR = Optimal profits - =
Consider the differentiated goods Bertrand price competition model where firms A and B produce similar goods and sell them at pA and pB. The demand for each firm’s product is given byqA =60−2pA +pB andqB =60–2pB +pA ,and there are NO costs of producing either good (all costs are 0). (a)Calculate the (Bertrand) equilibrium prices and the net profits of each firm (b) Now suppose that -instead of competing to maximize their own individual profits- the firms decide to “collude” and set prices pA and pB to maximize their joint profits (sum of their profits). What would be each firm’s optimal price and net profits? Compare these prices and profits with what you found in (a) (greater/smaller/the same?).
A firm supplies its product to a number of UK cities. Its overall cost function can be expressed as TC = 40q² + 900q – 250. The Demand function in Lancaster is given by p = 3600 - 10q and that in Norwich by p = 5040-6q. i) What prices should the firm charge for its product in Lancaster and Norwich? ii) If the firm only supplies its output to Lancaster and Norwich, is it profitable? Interpret your answer; why might the firm be unable to pursue this strategy? 5.
The inverse market demand curve is P(Y) = 108 - 4Y, and the total cost function for any firm in the industry is TC(y) = 8y + 10. What would the equilibrium output be for the industry (all firms combined) under the Bertrand model? Answer is an integer.
A manufacturer of fine pens produces in two plants. The total cost of producing in the first plant is given by TC1 = yi + 100. The total cost of producing in the second plant is given by TC2 + 200. 3 In these cost functions, y1 corresponds to the number of pens produced in the first plant, and y2 corresponds to the number of pens produced in the second plant. Suppose the firm's marginal cost is $256. If the firm is minimizing costs, the firm must be producing pens.
There are two identical firms in an industry, 1 and 2, each with cost function , i = 1,2. The industry demand curve is P = 100 − 5X where industry output, X, is the sum of the two firms’ outputs (X1 + X2). (a) If each firm makes its output decisions on the assumption that the other will not react to its choices (the Cournot assumption), what is the equilibrium output for each firm? What is the equilibrium price? (b) Suppose that each firm takes it in turn to choose its level of output, on the assumption that the other’s output level is fixed. Would the process of adjustment be stable? (c) Suppose that firm 1 introduces a cost-saving innovation, so that its cost curve becomes C1 = 8X1. Firm 2’s cost curve and the industry demand curve are unchanged. What happens to the equilibrium quantity produced by each firm and to market price?