Question 1Suppose the romaine lettuce industry is a Cournot duopoly with the following two firms:Amalgamated Romaine (a) and Best Romaine (b). The (inverse) market demand schedule is:p = 262 -0.5QAmalgamated Romaine has the following cost structure:MCATC₁ = $6Best Romaine has a different cost structure:MC₁ = ATC₁ = $8Find the following in Cournot-Nash equilibrium.a. Output of Amalgamated Romaine =b. Output of Best Romaine =c. Cournot duopoly equilibrium price = $unitsunits3 pts

The objective of the question is to find the output of Amalgamated Romaine, the output of Best…

Answered: Question 1 Suppose the romaine lettuce…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Part 2: First Long Question There are two French bakeries in a small town: Le Meilleur Croissant (C), owned by Camille, and Le Meilleur Pain Au Chocolat (P), owned by Paul. In each period of an infinitely repeated game, they compete a la Bertrand, with market demand given by Q(pmin) = 10 - Pmin- Even though they sell identical goods, they have different marginal costs: cc = 2 and %3D Cp = 4 (Paul bakes just as well but is bad at business decisions). There are no fixed costs. Question 6 Turns out that Camille and Paul are married, and so they choose prices to maximize the joint profits of the two firms. Because both love baking and love each other, they also jointly decide that both firms should be selling positive amounts in their optimal plan. What prices do they choose? Pc = 6, pp = 11 Pc = 6.5, pp = 6.5 Pc = 6, pp = 6 Pc = 7, pp = 7 %3D O pc = 6, pp = 7
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