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: In the work that follows, you may round all your results to 2 decimal places to reduce the clutter in your answers. a. b. TVC₁=30² TVC, =5Q C. Currently the market operates as a two-firm Cournot duopoly. Calculate the Cournot market equilibrium price-output solutions for each firm including their respective profits. Suppose that Able had entered this market first and had a first-mover advantage. In this case we would expect the Stackelberg outcome. Determine the market equilibrium price-output solutions for each firm including their respective profits. Summarize the results of your findings over the two possible outcomes. In your summary include price, quantity, and industry profits. Comment on your results.
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: In the work that follows, you may round all your results to 2 decimal places to reduce the clutter in your answers. a. b. TVC₁=30² TVC, =5Q C. Currently the market operates as a two-firm Cournot duopoly. Calculate the Cournot market equilibrium price-output solutions for each firm including their respective profits. Suppose that Able had entered this market first and had a first-mover advantage. In this case we would expect the Stackelberg outcome. Determine the market equilibrium price-output solutions for each firm including their respective profits. Summarize the results of your findings over the two possible outcomes. In your summary include price, quantity, and industry profits. Comment on your results.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
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 - 8Q
where l on
![Problem 3:
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:
In the work that follows, you may round all your results to 2 decimal places to reduce
the clutter in your answers.
a.
b.
TVC = 30²
TVC g = 50%
C.
Currently the market operates as a two-firm Cournot duopoly. Calculate the
Cournot market equilibrium price-output solutions for each firm including their
respective profits.
Suppose that Able had entered this market first and had a first-mover
advantage. In this case we would expect the Stackelberg outcome. Determine the
market equilibrium price-output solutions for each firm including their respective
profits.
Summarize the results of your findings over the two possible outcomes. In
your summary include price, quantity, and industry profits. Comment on your
results.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F179b6909-1704-4331-88ff-8f9584929559%2F1f527326-b51e-482f-8cae-03a690a2b0f6%2Fk5627h_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Problem 3:
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:
In the work that follows, you may round all your results to 2 decimal places to reduce
the clutter in your answers.
a.
b.
TVC = 30²
TVC g = 50%
C.
Currently the market operates as a two-firm Cournot duopoly. Calculate the
Cournot market equilibrium price-output solutions for each firm including their
respective profits.
Suppose that Able had entered this market first and had a first-mover
advantage. In this case we would expect the Stackelberg outcome. Determine the
market equilibrium price-output solutions for each firm including their respective
profits.
Summarize the results of your findings over the two possible outcomes. In
your summary include price, quantity, and industry profits. Comment on your
results.
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