Use the photo at exercise 14 to solve the problem below With the Firm Y response function Qy=600-1/2Qx and the Firm XX response function Qx=600-1/2Qy Imagine that firm X chooses their quantity first, then firm Y observes the quantity of firm X and chooses their own quantity. What quantities will they end up choosing? Is there a first or second-mover advantage here? [You may assume that firm X can only choose quantities that are multiples of 200.
Use the photo at exercise 14 to solve the problem below
With the Firm Y response function Qy=600-1/2Qx
and the Firm XX response function Qx=600-1/2Qy
Imagine that firm X chooses their quantity first, then firm Y observes the quantity of firm X and chooses their own quantity. What quantities will they end up choosing? Is there a first or second-mover advantage here?
[You may assume that firm X can only choose quantities that are multiples of 200. This prevents you from having to deal with prices that are not on the schedule. just a little thinking about how equilibrium works in a sequential-move game. Oh, and just give me the quantity for each firm, don't worry about giving me a complete strategy for firm Y.]
Step by step
Solved in 3 steps with 6 images
