only need options d) and e) There are two different market under the Galata Bridge. One of them is fried fishsandwich and the other is pickle. Consider two Cournot competitors selling goodswith demand curves given by:PF = 100 - qF + 0.5qPPp = 100 - qp + 0.5qFHere F and P indices refer fish and pickle markets respectively. For the sake ofsimplicity, assume that there is only one seller in each market.Suppose each firm has a marginal and average cost of $10.a. Using demand equations what can you say these two goods? Are theycomplement, substitutes or irrelevant? How do they differ from the standardCournot model?b. Find the equilibrium prices and quantities.c. Suppose the two firms merge. By doing so, the newly merged firm will act tomaximize the joint profits Find the joint-profit maximizing price andquantities.d. Áre the combined profits greater or smaller from merging? That is, is mergingprofitable for the firms?e. Are consumers better or worse off with the firms merging? How does thiscompare to the mergers of Cournot competitors selling substitutes? What doesthis imply about antitrust policy towards mergers of firms sellingcomplementary goods (such as airplanes and engines, computers andprocessors, cars and tire companies, etc).

Given, PF = 100-qF+ -0.5qp => qF = 100-PF+ 0.5

There are two different market under the Galata Bridge. One of them is fried fish sandwich and the other is pickle. Consider two Cournot competitors selling goods with demand curves given by: PF = 100 - qF + 0.5qP Pp = 100 - qp + 0.5qF Here F and P indices refer fish and pickle markets respectively. For the sake of

There are two different market under the Galata Bridge. One of them is fried fish sandwich and the other is pickle. Consider two Cournot competitors selling goods with demand curves given by: PF = 100 - qF + 0.5qP Pp = 100 - qp + 0.5qF Here F and P indices refer fish and pickle markets respectively. For the sake of

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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