Suppose we have two identical firms A and B, selling identical products. They are the only firms in the market and compete by choosing prices at the same time. The Market demand curve is given by P=244-2Q. The only cost is a constant marginal cost of $18. If Firm A chooses a price of $175 what is Firm B's best response? Enter a number only, no $ sign. 131
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- There are only two driveway paving companies in a small town, Asphalt, Inc. and Blacktop Bros. The inverse demand curve for paving services is ?= 2040 ―20? where quantity is measured in pave jobs per month and price is measured in dollars per job. Assume Asphalt, Inc. has a marginal cost of $100 per driveway and Blacktop Bros. has a marginal cost of $150. Answer the following questions: Determine each firm’s reaction curve and graph it. How many paving jobs will each firm produce in Cournot equilibrium? What will the market price of a pave job be? How much profit does each firm earn?Carl and Simon are the only sellers of pumpkins at the market, where the total demand function for pumpkins is q =3 ,200−1,600p. The total number of pumpkins sold at the market is q = qC + qS, where qC is the number that Carl sells, qS is the number that Simon sells. The cost of producing pumpkins for each farmer is $.50 per pumpkin; the fixed costs are zero. .a. Find the Cournot equilibrium price and quantities. .b. Find the Bertrand equilibrium price and quantities. . .c. Suppose now that every spring the snow thaws off of Carl’s pumpkin field a week before it thaws off of Simon’s. Therefore, Carl can plant his pumpkins one week earlier than Simon while predicting Simon’s choice based on the previous year information. Simon observes Carl’s choice and chooses how much pumpkin to plant. Find the new equilibrium price and quantities. .d. Compare the quantities and prices in parts a, b, and c. Rank these outcomes according to Pareto efficiency.A gas station sells gas for... A gas station sells gas for capacity of a gas station is 700 liters per day, that is it can store any quantity of gasoline up to this capacity. A gas station cannot sell more gasoline per day than it currently stores. Suppose the demand for gasoline is uniformly distributed between 0 and 1500. Profit of a gas station is given by its revenue from selling gasoline minus the cost of buying it from a wholesaler. Provide a numerical answer to each question. ipertiterandbussitusingthewholesalepricco p0.5 per liter. A storage 2) Given the current storage capacity, find the quantity of gasoline the gas station must store in order to maximize its expected daily profit.
- The soluation avilible I believe it is wrong so please solve it carefully Carl and Simon are the only sellers of pumpkins at the market, where the total demand function for pumpkins is q =3 ,200−1,600p. The total number of pumpkins sold at the market is q = qC + qS, where qC is the number that Carl sells, qS is the number that Simon sells. The cost of producing pumpkins for each farmer is $.50 per pumpkin; the fixed costs are zero. .a. Find the Cournot equilibrium price and quantities. .b. Find the Bertrand equilibrium price and quantities. . .c. Suppose now that every spring the snow thaws off of Carl’s pumpkin field a week before it thaws off of Simon’s. Therefore, Carl can plant his pumpkins one week earlier than Simon while predicting Simon’s choice based on the previous year information. Simon observes Carl’s choice and chooses how much pumpkin to plant. Find the new equilibrium price and quantities. .d. Compare the quantities and prices in parts a, b, and c. Rank these outcomes…Suppose that a latte can only be produced by using exactly 1 ounce of espresso (E) and 3 ounces of milk (M). What is the firm's cost function if the price of espresso is 0.50 per ounce and the price of milk is 0.10 per ounce? a. C = 4q b. C = 0.8q c. C = 0.4q d. C = 160q e. C = 80qThere are two firms in the pumpkin industry: C and S. The demand function for pumpkins is q = 3, 200 - 1, 600p. The total number of pumpkins sold at the market is q = qC + qS, where qC is the number that C firm sells and qS is the number that S firm sells. The cost of producing pumpkins for either firm is $0.50 per pumpkin no matter how many pumpkins they produces. 1. Every spring, each of the firms decides how many pumpkins to grow. They both know thelocal demand function and they each know how many pumpkins were sold by the other firmlast year. In fact, each firm assumes that the other firm will sell the same number this year asits sold last year. So, for example, if firm S sold 400 pumpkins last year, firm C believes thatfirm S will sell 400 pumpkins again this year. If firm S sold 400 pumpkins last year, what doesfirm C think the price of pumpkins will be if firm C sells 1,200 pumpkins this year? 2. If firm S sold 400 pumpkins last year, firm C believes that if he sells qtCpumpkins…
- Two firms facing a demand curve are P = 50 -5Qwhere Q = Q1 + Q2. The cost functions of the two firms are:C1(Q1) = 20 + 10Q1C2(C2) = 10 + 12Q2Based on this information:a. Suppose both companies have entered the industry, then what is the price?and the profit-maximizing amount for the two firms under conditionsperfectly competitive market?b. What is the quantity, price and profit of the two firms ifcompanies collude in pricing?c. What are the quantities, prices, and profits of the two firms if theydo the Cournot strategy, and draw the reaction curves of the twothe company?d. What are the quantity, price, and profit of the two firms if theycarry out the stakeberg strategy.Short-run supply and long-run equilibrium Consiber the competitive market for rhodium. Assume that no matter how many firms operate in the induatry, every firm is identical and faces the same marpinal cost (MC), averapt total cost (ATC), and average variable cost (AVC ) curves plotted in the following praph. The following graph plots the market demand curve for thodium. If there were 10 firms in this market, the short-run equilibrium price of rhodium would be per pound. At that price, firms in this industry would. Therefore, in the long run, firms would the rhodium market. Because you know that competitive firms earn economic profit in the long run, you know the long-run equilibrium price must be per pound. From the graph, you can see that this means there will be firms operating in the rhodium industry in long-run equilibrium. True or False: Assuming implicit costs are positive, each of the firms operating in this industry in the long run earns positive accounting profit. True FalseDiscuss economies of scale and how average cost changes as output increases. What pricing strategy should a firm adopt while they are experiencing economies of scale? 250 words please
- Three firms are producing a good and are competing in prices: consumers buy from the firm that has the lowest price, and each firm on its own can satisfy the entire market. If more than one firm choose the same price the demand is divided equally among them. There are no other firms in the market. Two firms have the same constant marginal cost cL and the third one has a higher marginal cost cH : cL < cH . Explain what will be the equilibrium price in this market.Suppose the graph depicts the marginal cost (MC) curves of two profit maximizing Texas cotton farmers, Jesse and Neal. Assume Jesse and Neal sell their cotton in the same competitive market. If the market price is $4 per bale, how many bales of cotton should each farmer produce? Jesse's optimal output: 800 Neal's optimal output: 400 bales MC Neal = MC Jesse MC Neal MC Jesse Price and cost $10- 9 8 7 160 5 4 3 2 0 MC, Neal MC, Jesse 100 200 300 400 500 600 700 800 900 1000 Bales of cottonSuppose there are in total 3 firms in the market. Firm 1 decides its output first, then Firm 2 and Firm 3 decide their outputs simultaneously. The inverse demand function is p = 14 – 3q, where q = q1 + q2 + 43, and each firm's cost function is c(q.) = 2q?. What is the quantity that Firm 1 produces? Round your answer to 2 decimal points. Answer: The correct answer is: 1.04