t in 30 minute please duopoly with homogeneous goods. There ar

Calculus: Early Transcendentals
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Author:James Stewart
Publisher:James Stewart
Chapter1: Functions And Models
Section: Chapter Questions
Problem 1RCC: (a) What is a function? What are its domain and range? (b) What is the graph of a function? (c) How...
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please solve it in 30 minute please
Consider a Cournot duopoly with homogeneous goods. There are t wo firms that
choose non-negative quantities q1 >0 and q2 2 0. The market price is
p(g1, 92) = max{1 – 1 – 92, 0}
The marginal cost is ce (0, 1) for both firms. Overall, the profit functions are
T(41, 92) = (p(41, 2) – c)g1,
T2(41, 92) = (p(41, 2) – c)q2.
Suppose that firm 1, the "leader," chooses the quantity first. Firm 2, the "follower,"
observes the quantity chosen by firm 1 and then chooses the quantity to produce.
(a) What is a pure strategy of firm 1? What is a pure strategy of firm 2?
(b) Find a subgame-perfect equilibrium of the game.
(c) Find a Nash equilibrium that is not subgame perfect.
Transcribed Image Text:please solve it in 30 minute please Consider a Cournot duopoly with homogeneous goods. There are t wo firms that choose non-negative quantities q1 >0 and q2 2 0. The market price is p(g1, 92) = max{1 – 1 – 92, 0} The marginal cost is ce (0, 1) for both firms. Overall, the profit functions are T(41, 92) = (p(41, 2) – c)g1, T2(41, 92) = (p(41, 2) – c)q2. Suppose that firm 1, the "leader," chooses the quantity first. Firm 2, the "follower," observes the quantity chosen by firm 1 and then chooses the quantity to produce. (a) What is a pure strategy of firm 1? What is a pure strategy of firm 2? (b) Find a subgame-perfect equilibrium of the game. (c) Find a Nash equilibrium that is not subgame perfect.
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