Suppose that the market demand for facial mud packs are given as follows: P = 2,200 – Q. Mud packs can be produced at no cost. Determine the level of output that would be produced by each firm in a Cournot duopoly in the long run. Calculate the price charged for mud packs. Show all calculations.
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Suppose that the market demand for facial mud packs are given as follows: P = 2,200 – Q. Mud packs can be produced at no cost. Determine the level of output that would be produced by each firm in a Cournot duopoly in the long run. Calculate the price charged for mud packs. Show all calculations. [9]
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- Suppose that the market demand for facial mud packs are given as follows: P = 2.200 - Q. Mud packs can be produced at no cost. Determine the level of output that would be produced by each firm in a cournot duopoly in the long run. Calculate th price charged for mud packs. Show all calculations.The market for dark chocolate us characterized by Cournot duopolists - Honeydukes and Wonka industries. The market demand for dark chocolate is: P = 8 - 0.005Qd where P is the price per bar in dollars and Qd is dark chocolate's daily quantity demanded in bars (use qh to represent the quantity of dark chocolate sold by Honeydukes and qw to represent the quantity of dark chocolate sold by Wonka Industries). Honeydukes has a constant marginal cost of $2.50 per bar, while Wonka Industries has a constant marginal cost of $3.00 per bar. The firms move simultaneously in choosing their profit-maximizing quantity of output. a. Given the firms move simultaneously, what is the equation for Honeydukes' reaction function with qh expressed as a function of qw? b. Given the firms move simultaneously, what is the equation for Wonka's reaction function with qw expressed as a function of qh? c. What quantity of dark chocolate will each firm produce in equilibrium and what price will be established for a…QUESTION 4: The graph below shows the demand and costs data for a one of firms operating in a market with a highly differentiated product/All underlying work must be shown MC ATC $11.50 $10.00 $9.00 $6.00 D MR 200 400 700 s00 Quantity A) Refer to the graph above. If the firm in the graph above maximizes profit, it will produce units of output and charge price per unit. A) 400; $10 B) 600; $6 C) 900; $9 D) 600; $11.50 B) Refer to the graph above. At the profit maximizing output level, the firm from above will earn: A) zero economic profit. B) $900 total economic profit. C) $2,700 economic profit. D) $2,700 economic loss. C) Refer to your answer above. You can conclude that if there are no barriers to entry: a) new fims will enter this industry in the long run in a search of profit. b) existing firms will exit this industry in the long run because of the short-run losses. c) this industry is in long-run equilibrium, and there are no incentives to enter or exit. d) the price per unit of…
- Duopoly quantity-setting firms face the market demand p=270 -a. Each firm has a marginal cost of $30 per unit. What is the Cournot equilibrium? The Cournot equilibrium quantities for Firm 1 (q,) and Firm 2 (92) are units and 92 = units. (Enter numeric responses using real numbers rounded to two decimal places.)Suppose a country's mobile phone industry is supplied by only two firms (i.e. an oligopoly). Explain how the presence of two firms affects the price elasticity of demand of each firm's output.Duopoly quantity-setting firms face the market demand p= 90 -Q. Each firm has a marginal cost of $15 per unit. What is the Cournot equilibrium? The Cournot equilibrium quantities for Firm 1 (9,) and Firm 2 (42) are 91 units and units. (Enter numeric responses using real numbers rounded to two decimal places.) The Cournot equilibrium price is What is the Stackelberg equilibrium when Firm 1 moves first? The Stackelberg equilibrium quantities when Firm 1 moves first are 91 = units and 92 = units. %3D The Stackelberg equilibrium price is
- The market for knitted scarves at a local, weekend farmers' market is a Stackelberg duopoly. Sammy's Scarves acts as the Stackelberg leader and Knitting Nancy as the Stackelberg follower. Both Sammy and Nancy know that the market demand for knitted scarves at the farmers' market is: Q=320-4P where Q is the quantity of knitted scarves demanded and P is the price of a knitted scarf. Solving the market demand for P as a function of Q gives the inverse market demand: P-80-0.25Q. Sammy produces qs knitted scarves, and Nancy produces q knitted scarves. Each incurs a total cost of producing q; knitted scarves of TC (91)= =30+20q Sammy will sell 140 knitted scarves and Nancy will sell 70 knitted scarves at the local, weekend farmers' market.6. Two firms, Firm 1 and Firm 2 and are competing in quantities. The demand they are facing is given by p=1-91-92, with p being the price of the good, and 9₁ and 92 the quantities produced by firm 1 and 2 respectively. The total cost of firm 1 is TC1 (91) = 9₁ and the one of firm 2 is TC₂ (92) = 292. (a) Find the Cournot equilibrium. (b) The government decides that it wants to make the market more competitive. As such it decides to offer to Firm 1 a license to become the leader in the market. The licence costs F, and if Firm 1 buys it, it will be allowed to choose its quantity before Firm 2. What is the maximum Firm 1 would be willing to pay for this license?The market demand curve faced by Stackelerg duopolies is: Qd = 12,000 - 5P where Qd is the market quantity demanded and P is the commodity's price in dollars. Firm A's marginal cost is: MCa = 0.08qa where MCa is Firm A's marginal cost in dollars and qa is the quantity of output produced by Firm A. Firm B's marginal cost equation is: MCb = 0.1qb where MCb is Firm B's marginal cost in dollars and qb is the quantity of output produced by Firm B. Because of Firm A's lower marginal cost, Firm B has conceded the power to move first to Firm A. a. Given Firm B will move second, what is the equation for Firm B's reaction function with qb expressed as a function of qa? b. Given Firm A can move first, what quantity of output will Firm A produce? c. What quantity of output will firm B produce? What price will be established for the commodity?
- Question 2 Consider a Cournot duopoly, the firms face an (inverse) demand function: Pb=268-10Qb. The marginal cost for firm 1 is given by mc1= 6Q The marginal cost for firm 2 is given by mc2=4Q (Assume firm 1 has a fixed cost of $102 and firm 2 had a fixed cost of $104 What are the profits of firm 2? (hint 567.26) How much consumer surplus is created by industry transactions? (hint 1333.34) Full explain this question and text typing work only We should answer our question within 2 hours takes more time then we will reduce Rating Dont ignore this line ...You are a producer in a monopolistically competitive market of a good that is seen as being critical in the fight against the coronavirus (use hand sanitizer as an example), assume prior to the virus outbreak you had been producing a quantity that equated MR to MC and thereby allowed you to optimize your profitability. Further assume the price you are authorized to sell the product for has now been frozen by government order, and you have been mandated by government order to increase the quantity of the product you must produce to service the spike in market demand. Explain what you believe will happen to the profitability of this firm including in your answer what will happen to MC as your output expands and to your MR as price is forced to remain constant.Suppose the total demand for specialty coffee per hour in Ruston is Q = 640 - 80P. There are six (n = 6) monopolistically competitive firms currently in the market selling some variety of specialty coffee, each with total cost curves given by: TC₁ = 20+q; +0.0125q²| a. Find the proportional demand faced by one coffee shop, denoted Firm i. That is, suppose the firms have equal market share and determine the demand function for a single firm. b. Calculate the optimal quantity produced by Firm i. c. Calculate Firm i's profits. Will there be entry or exit by other coffee shops over time? d. Provide a generic graph the long-run outcome for Firm i given your prediction from (c). Label curves, axes, and intersection points.