How to answer each Presently, Able High Lift and Baker Overhead are the only suppliers of services that can lift heavyconstruction material to the heights required for high-rise construction projects the Northwest. Noother suppliers have the equipment necessary to perform these lifts. The market inverse demandfor these services is given below.P=800-80where P is price per lift and Q is total number of lifts per week. For simplicity, also assume thatneither firm has fixed costs. From company records, you are given the following variable costfunction for each firm:TVC₁ = 30TVC = 50In the work that follows, you may round all your results to 2 decimal places to reduce the clutterin your answers.a. Currently the market operates as a two-firm Cournot duopoly. Calculate the Cournot marketequilibrium price-output solutions for each firm including their respective profits.b. Suppose that Able had entered this market first and had a first-mover advantage. In this casewe would expect the Stackelberg outcome. Determine the market equilibrium price-outputsolutions for each firm including their respective profits.c. Summarize the results of your findings over the two possible outcomes. In your summaryinclude price, quantity, and industry profits. Comment on your results.

Cournot Duopoly Equilibrium and Stackelberg Duopoly Equilibrium are two models used in economics to…

Presently, Able High Lift and Baker Overhead are the only suppliers of services that can lift heavy construction material to the heights required for high-rise construction projects the Northwest. No other suppliers have the equipment necessary to perform these lifts. The market inverse demand for these services is given below. P=800-80 where P is price per lift and Q is total number of lifts per week. For simplicity, also assume that neither firm has fixed costs. From company records, you are given the following variable cost function for each firm:

Presently, Able High Lift and Baker Overhead are the only suppliers of services that can lift heavy construction material to the heights required for high-rise construction projects the Northwest. No other suppliers have the equipment necessary to perform these lifts. The market inverse demand for these services is given below. P=800-80 where P is price per lift and Q is total number of lifts per week. For simplicity, also assume that neither firm has fixed costs. From company records, you are given the following variable cost function for each firm:

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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