There are two firms in a homogenous product market described by the demand function P(q1,q2)%3D131-(1/5)(q1+q2), and both firms have marginal costs of 50. Firms choose once and simultaneously quantities. How much does firm 1 produce in equilibrium?
Q: Consider a market with two firms. Each firm is located at one end of a line with lenght one. There…
A: The demand from consumers is the situation when consumers are willing to and capable to buy a…
Q: Since you know all about perfect competition, monopoly, and oligopoly, we can find out how various…
A: An oligopoly is a market structure characterized by a small number of dominant sellers who control a…
Q: 6. Calculate the profits for firm 1 for the situation described in question 15 before, where the…
A: Given : P = 131 - q1 +q25 MC1= MC2= 50 In case of cournot equilibrium firm choses simultaneous…
Q: Carl and Simon are two pumpkin growers who are the only sellers of pumpkins at the market. The…
A: Given:- Q=8400-800P MC=0.50 Here; Q=quantity of pumpkin P=Price of pumpkin Please find the image…
Q: 9. a) Determine the degree of homogenous and return to sale of the following production functions.…
A: Since you have provided multiple sub-parts questions, we will solve the first three subparts for…
Q: Consider two firms competing to sell a homogeneous product by setting price. The inverse demand…
A: There are two firms competitive to sell a homogenous product by setting prices. The inverse demand…
Q: A homogenous good industry consists of two firms (firm 1 and firm 2). Their cost functions are cq₁…
A: In this question there are two businesses firm 1 and firm 2 producing the same product. Each…
Q: You are the manager of Taurus Technologies, and your sole competitor is Spyder Technologies. The two…
A:
Q: Consider two firms engaged in Cournot Competition. The market demand curve is P = 50-2Q where…
A: The firms compete on the basis of output in the Cournot competition. The reaction functions of each…
Q: None
A: Step 1:Step 2:
Q: Lucia owns a plot of land in the desert that isn't worth much. One day, a giant meteorite falls on…
A: Given:- Lucia marginal cost=0 Lucia charges price=$4 No. of market=2 i.e Market A and Market B…
Q: Alpha and Gamma are the only two phone handset manufacturers in the world. Each firm has a cost…
A: An oligopoly market is one that has few large firms which are interdependent selling homogenous as…
Q: Output is homogenous and the demand curve P = 448 - Q. There are two firms with identica %3D costs…
A: As it is given to us that P=448-Q C=Qi^2 MC=2Qi
Q: Consider two firms facing the demand curve P=90-5Q, where Q Q₁+Q2. The firms' cost functions are and…
A: A duopoly denotes a market where two firms hold substantial sway over pricing, output, and market…
Q: = 100 – 2Y, and the The inverse market demand curve for salmon is given by P(Y) total cost function…
A: Cournot's model shows the equilibrium when firms are competing in terms of quantity.
Q: Two firms produce the same good and compete against each other in a Cournot market. The market…
A: The Cournot model of oligopoly outlines a scenario where a small number of firms autonomously…
Q: Problem 3 Consider a market with two firms. Each firm is located at one end of a line with lenght…
A: In this scenario, the advertising company suggests targeting consumers in two different regions…
Q: 7. Two firms are competing in a market where the model of competition is Cournot. The inverse demand…
A: In Cournot duopoly, each firm competes in quantity and maximize profit by producing output where…
Q: Consider a market demand function P=100-0.01Q. There are only two firms in the market and each…
A: Answer: Given, Demand function: P=100-0.01QWhere,Q=q1+q2 Total cost functions of both the firms:…
Q: 1. there are two companies (company 1 and company 2) that operate in a market where both firms…
A:
Q: Two firms produce complementary products. Suppose the demand for their products is given by q1(p) =…
A: An oligopoly is a market with few large firms, high barriers to entry, and significant…
Q: Consider the daily market for hot dogs in a small city. Suppose that this market is in long-run…
A: For the equilibrium price & quantity under perfect competition:
Q: 10Two firms produce differentiated products. The demand for each firm’s product is as follows: …
A: q1=20-2p1+p2q2=20-2p2+p1C(q)=TC=5qMC=dTCdqMC=5TR1=p1q1 =p1(20-2p1+p2)…
Q: Three firms compete in the style of Cournot. All firms have a constant returns to scale technology:…
A: Introduction Here three firms of Cournot model has given. Marginal cost of two firms also given.…
Q: Suppose the price reaction function for Mars' chocolate bars is Pm = (Vm+cm)/2)+0.5Ph, where Pm is…
A: Price reaction function for Mars chocolate is:- Pm = (Vm +Cm)/2) + 0.5Ph Price reaction function for…
Q: 4. In a duopoly market, two firms produce the identical products, the cost function of firm 1 is: C…
A: Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…
Q: wo firms produce the same good and compete against each other in a Cournot market. The market demand…
A: Note: “Since you have asked multiple questions, we will solve the first question for you. If you…
Q: Considerthe following problem. There are five firms producing a homogenous good and competing in…
A: The demand is the willingness of an individual to pay in the market and his ability to purchase the…
Q: The inverse demand curve for a product is p = 20-Q/5, where Q is the total volume brought to the…
A: Given: Inverse Demand Curve: P=20−Q/5Firm 1: Constant Marginal Costs = $5, Fixed Costs = $100 Firm…
Q: 5. Suppose there are two firms in a Cournot type setting (choosing quantity simultaneously). How…
A: The oligopoly Cournot model states that businesses in a given industry produce the same good and…
Q: 7. 2 firms are engaged in Bertrand competition. They each face the following cost curve C(Q) =…
A: Bertrand equilibrium refers to the equilibrium where the price is equal to marginal cost. It means…
Q: TB MC Qu. 09 - 92 Consider two firms competing... Consider two firms competing to sell a homogeneous…
A: The two firms compete to sell a homogenous productThe inverse demand function is Each firm's cost…
Q: There are two firms that are producing identical goods in a market characterized by the inverse…
A: The objective of the question is to understand the Cournot competition model and calculate the…
Q: Two firms compete in selling homogeneous goods. They choose their output levels q1 and q2…
A: We know that market forces demand and supply lead to determination of price and quantity of goods.…
Q: Assume that prior to the outbreak of the coronavirus (Covid-19), the natural gas industry was in…
A: The phrase "long-term" refers to the time span during which a company can change all of its inputs.…
Q: . Consider a market with inverse demand P(Q) = 100 Q and two firms with cost function C(q) = 20q.…
A: ANSWER STEP-1 (1) Consider a market with inverse demand P(Q) = 100 Q and two firms with cost…
Q: Suppose we have two identical firms A and B, selling identical products. They are the only firms in…
A: Marginal Revenue refers to the extra revenue that a firm receives from the sale of an extra unit of…
Q: an Problem 5. Consider following price competition between 2 firms. Both firms choose their prices…
A: In game theory, a Nash equilibrium is a situation in a non-cooperative game in which no player has…
Q: In the domestic airline market, where companies compete on the number of seats they make available…
A: There are different types of market structure like perfect competition, monopoly, monopolistic…
Q: Exercise 2.9. Consider an industry where there are two firms, a large firm, Firm 1, and a small…
A: a) An extensive-form game is a mathematical representation of a strategic interaction between…
Q: **Practice** Consider a market with three firms. Each firm has a different cost function. We assume…
A: In oligopoly market structure, there are handful of suppliers and numerous buyers. Firms compete…
Q: 1. if the total cost function for this market is TC = 500 + 10Q2 , calculate the total and marginal…
A: The market equilibrium is the crux of capitalist economy, where market forces of demand meet supply…
Q: Assume the inverse demand function in a market is given by P(Q) = 500 – Q where Q is the total…
A: Market Demand function : P = 500 - Q => P = 500 - (q1 + q2 ) Where , Q = Total Quantity for two…
Q: 1. there are two companies (company 1 and company 2) that operate in a market where both firms…
A: Given that: Q = 11 - 0.25PQ = q1 + q2TC = 4qa In Bertrand Competition with homogeneous items, the…
Q: 2. Two webpages offer the same service. The inverse demand for the service is q = 10 – p. Their cost…
A: Marginal costs of firms are MC1 =1 and MC2 = 4. In Bertrand price setting competition, marginal cost…
Q: & The market demand is Q(P) = 10 - P, there are N+1 firms, one firm, referred to as "Firm 1" has…
A: The total quantity desired for a given good by all consumers in a market is known as market demand.
Q: Consider the differentiated goods Bertrand price competition model where firms A and B produce…
A: Bertrand price competition model: Bertrand competition is a type of competition in which two or more…
Q: onsider a homogenous good industry with four firms. Total demand is given by D(p)=200-p. The…
A: The impact of a merger on welfare can be complex and contingent on various factors. When assessing…
Q: An industry contains two firms and the inverse demand function for the firms output is P-180-30,…
A: Firms competes based on the output in Cournot model. The output in the Cournot model is Nash…
Step by step
Solved in 2 steps
- please help me with the last question. Thank you1. Consider a market where there are only two firms that produce a homogeneous product. The two firms face the direct market demand curve given Q = 15-p, where Q = 9₁ +92 and 9₁ and q2 are the quantities of firm 1 and firm 2, respectively. Suppose firm 1's total cost is C₁ = 9₁ and firm 2's total cost function is C₂ = 2q2. Suppose that the two firms act independently and choose their outputs simultaneously as in the Cournot model. Show the basis and briefly explain what is going on as you answer each of the following questions. Your mark will depend upon the correctness of your basis and explanation. 1. What is the equation of the demand curve faced by firm 1? What is the equation of the demand curve faced by firm 2? Find the output reaction function of each firm. 2. 3. Find the Nash-Cournot equilibrium quantity that each firm will produce. 4. At the Nash-Cournot equilibrium, at what price does each firm sell its output? 5. Find the consumer surplus, producer surplus at the…Two firms compete on price every year. The inverse demand function each firm faces depends on which firm has chosen the lowest price that year. The one that did captures the entire market. If, on the other hand, both prices are the same then they split the market evenly. Consumers round up prices to the nearest integer. For the firm with the lowest price p, demand is given by: q = 24-2p: Marginal costs are constant and equal to $4 for both firms. a. Define the Normal form of the stage game and determine the Nash Equilibria, the Cooperative Equilibrium and the Optimal Deviation from cooperation. b. For the once repeated (2 stages) game, determine if a Nash Equilibrium exists that improves on simply playing the (better) Nash Equilibrium of the stage game twice c. For the infinitely repeated game, determine what the interest rate would have to be to prevent the firms from cooperating. d*. Determine the relation between the interest rate and the number of punishment periods in a…
- There are two identical firms in an industry, 1 and 2, each with cost function , i = 1,2. The industry demand curve is P = 100 − 5X where industry output, X, is the sum of the two firms’ outputs (X1 + X2). (a) If each firm makes its output decisions on the assumption that the other will not react to its choices (the Cournot assumption), what is the equilibrium output for each firm? What is the equilibrium price? (b) Suppose that each firm takes it in turn to choose its level of output, on the assumption that the other’s output level is fixed. Would the process of adjustment be stable? (c) Suppose that firm 1 introduces a cost-saving innovation, so that its cost curve becomes C1 = 8X1. Firm 2’s cost curve and the industry demand curve are unchanged. What happens to the equilibrium quantity produced by each firm and to market price?In this question you will work out a model of price competition (Bertrand competition) with differentiated products, i.e., when the two firms that compete produce slightly different products. Consider two price-setting firms, 1 and 2, each with marginal cost c, that produce goods, 1 and 2, that are imperfect substitutes. Some customers are loyal to a particular variety of the good so both firms can still have positive sales when they set different prices. Demand for firm 1's output, q1, as a function of the prices of both products, p1 and p2 , is given by q1 = 2 – 3p1 + 3p2. And the demand for firm 2's output, q2, is given by q2 = 6 – 2p2 + P1. a. How can we tell, by looking at the demand functions above, that in the preferences of consumers the two products are substitutes? Explain your answer.. b. Write this strategic situation as a simultaneous game between the two firms, specifying the set of players, the set of alternatives and the preferences of each firm. Write down the profit…Answer 1, 2 and 3, see the question properly.
- Economics: Industrial Economics Question: In a market that operates under quantity competition there are 2 firms (Cournot duopoly). The inverse demand function is P = A - B Q. The cost structure of firm 1 is given by C1(q1) = F1 + c1 q1 and that of firm 2 is given by C2(q2) = F2 + c2 q2. Prior to competing, the two firms can engage in research at levels (x1, x2) respectively in order to lower their marginal costs. As a result, marginal costs are c1 = c - x1 - β2x2 and c2= C - x2 - β1 X1. where β1 = β2 > ½. Finally, the research costs are F1 = a1 (x1)^2 /2 and F2 = a2 (x2)^2 /2, where a1 > 0 and a2> 0. 1. The Nash Equilibrium research levels are Choices: A. Higher than the cooperative research levels for both firms. B. Higher than cooperative research levels for firm 1 but lower for... C. Lower than the cooperative research levels for both firms. D. Higher than cooperative research levels for firm 2 but lower for... 2. An increase in the value of a2 would Choices: A.…Compute the equilibrium prices, quantities, and profits for both firms. Consider now the first stage.2
- 5. N - Σ Consider a Cournot model in which N firms compete with each other by setting quantities. The market inverse demand function is P = a i=1 qi, where a > 0 and q; is the quantity of firm i. Firm i's cost function is quadratic: q, where c₂ > 0. (a) Suppose N 2. Find the Nash equilibrium. Show which firm produces more in the equilibrium and explain your result. (b) = Suppose N≥ 2 and ci = c for all i. Find the Nash equilibrium. Show whether the firms produce more or less than the constant marginal cost case where the cost function is cqi, with a>c>0.Consider an industry comprised of three identical firms faced with a linear cost function given by: C(qi) = cqi; for i = 1; 2; 3. Let inverse market demand be given by: P(Q) = a - bQ; where Q = q1 + q2 + q3.a. Compute the Cournot equilibrium; that is, find prices, quantities, and profits.b. Suppose that firms 1 and 2 merge, converting the market into a duopoly consisting of the “superfirm” and firm 3. Compute the new Cournot equilibrium. Once again find prices, quantities, and profits.c. Suppose that all three firms merge. Compute quantities, prices, and profits for the cartel solution.d. Suppose that firm 1 and 2 represent two members of OPEC – Saudi Arabia and Venezuela, say – while firm 3 is a non-OPEC oil exporting country – Russia, say. Describe the dynamics of OPEC. (Hint: re-interpret the solution to part 2, as 1 firm deviating from the fully cartelized solution. Is it convenient to have a partial cartel?)COURSE: MICROECONOMICS - Cournot Model:In the market for a given good there are only 2 firms satisfying the demand, and their respective total cost functions respond to the form: CTi = 10Qi + 5 and the demand is estimated to be: P = 31 - QIf the decision variable for both firms is that the quantity they will produce and realize will be decided simultaneously it is asked to:(a) calculate the profit and reaction function of each firmb) graph market equilibriumc) calculate the profits that both companies will obtain in equilibrium
