1.-There are only two firms in the market, Firms A and B, producing differentiated products. Specifically, the demands for the two firms' products are given by qA = 30 − 2pA + pB and qB = 15 − 2pB + pA, where pi denotes the price charged by Firm i and qi denotes the resulting number of units that will be purchased from Firm i. Each firm can produce as much as it chooses, at zero marginal cost. The firms compete with one another in prices.  (c) Now suppose firms choose quantities, instead of prices. Obtain the equilibrium choices

Question

1.-There are only two firms in the market, Firms A and B, producing differentiated products. Specifically, the demands for the two firms' products are given by qA = 30 − 2pA + pB and qB = 15 − 2pB + pA, where pi denotes the price charged by Firm i and qi denotes the resulting number of units that will be purchased from Firm i. Each firm can produce as much as it chooses, at zero marginal cost. The firms compete with one another in prices. 

(c) Now suppose firms choose quantities, instead of prices. Obtain the equilibrium choices

Expert Answer

Want to see the step-by-step answer?

Check out a sample Q&A here.

Want to see this answer and more?

Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*

*Response times may vary by subject and question complexity. Median response time is 34 minutes for paid subscribers and may be longer for promotional offers.
Tagged in
Business
Economics

Related Economics Q&A

Find answers to questions asked by students like you.

Q: How does the growing national debt impact minimum wage and the future population? As national debt g...

A: The national debt is the amount of debt borrowed by federal government, to overcome and fulfill the ...

Q: What happens to each sector of the economy when recession occurs?

A: The recession can be defined as a phase in the business cycle which characterised by a general slowd...

Q: plans are underway for a new stadium for a baseball team. City officials question the number and pro...

A: Given fixed cost = $4,500,000 , Variable cost = $ 150,000Customer may Purchase at $300,000

Q: 2.The Secretary of the Treasury was authorized by Congress to mint and sell a stated number of comme...

A: “Hello, thank you for the question. Since there are multiple questions posted, we will answer the fi...

Q: Suppose the California legislature passed a sweeping law to DECREASING the parking requirements and ...

A: 1.When the government decided to reduce the parking requirements for the housing along with setback ...

Q: In the healthcare economy, as in many other markets, if the firm has a high capital-to-labor ratio, ...

A: To show the relationship between capital-labor ratio and the responsiveness to a change in price.

Q: 9a and 9b?

A: Monopoly market is a market with single seller of a good or service that does not have any close sub...

Q: Show that the two utility functions given below generate identical demand functions for goods X and​...

A: Utility function with the same marginal rate of substitution (MRS) will going to generate the same d...

Q: Given the following data: Gross Investment Expenditure.. .$200 Government Transfer Payments...150 Bu...

A: a.The gross domestic product is the sum total of money value of all the final goods and services pro...

Q: In Goa, India, the multiplier effect of iron ore exports is calculated to be 1.62 (Ta, 2003). Calcul...

A: As the multiplier effect is calculated as 1.62, So the impact of additional 1,000 rupees of iron ore...

Q: Most hospitals and nursing homes, and some insurance companies, do not aim to maximize profit but ai...

A: To determine the aim of insurance companies and hospitals.

Q: True False Answer Bank The term "cap and trade" describes regulation by marketable permits Compared ...

A: Click to see the answer

Q: If the price of one of the products is associated with indifference curves increase, all else the sa...

A: Answer - If the price of one of the products is associated with the indifference curves increase, al...

Q: Suppose that in a closed economy GDP is equal to 11,000, taxes are equal to 1,500, consumption equal...

A: The closed economy is the type of economy in which there are no trade relations exists with the othe...

Q: Calculate the change in the share of employment by education levels between January 1992 and January...

A: The percentage change can be calculated by:

Q: If Sam is willing to pay $50 for one good X, $30 for a second, $20 for a third, $8 for a fourth, and...

A: To determine the consumer surplus of person S.

Q: Classify each scenario based on whether it increases or decreases aggregate demand (AD) Increases Ag...

A: The total demand of all goods and services produced in an economy at given prices is called aggregat...

Q: What happens to aggregate demand when transfer payments and the taxes to pay them both rise by the s...

A: Click to see the answer

Q: The slope and position of the long-run aggregate supply curve Suppose the Fed doubles the grow...

A: The Fed doubles the growth rate of quantity of money in the economy which means that there is an inc...

Q: Three students have each saved $1,000. Each has an investment opportunity in which he or she can inv...

A: A year later project will pay Carlos, Felix, and Janet as follows:

Q: 1. One-Shot, Pricing Game. You are a pricing manager at Argyle Inc.-a medium-sized firm that recentl...

A: The Mr. A and Mr. B are the two firm that are competing against each other. Mr. B’s want to maximize...

Q: The residents of the town Ectenia all love economics and the mayor proposes building an economics mu...

A: Part a)The ATC and MC curves are displayed below. Since there are no variable costs, the Average tot...

Q: Consider the product of gasoline. Its PES is estimated at 1.6. Which of the following would be true?...

A: (1) If the price elasticity of supply is 1.6 means, the price elasticity of supply is elastic. That ...

Q: Using the aggregate demand and aggregate supply model, explain the effects of the following on price...

A: The decision to revamp the public transportation will increase government spending and raise the agg...

Q: Give a solution to fix a serious national recession

A: The recession is a situation of declining the Gross Domestic Product of the economy due to the decli...

Q: Suppose in a year an American worker can produce 100 shirts or 20 computers, while a Chinese worker ...

A: A Production Possibility Curve (PPC) is a graph that shows all the possible combinations of two comm...

Q: Should an economic model describe reality exactly?

A: An economic model is a basic framework of the real-world. It is used to examine the real-world econo...

Q: The United Kingdom (UK) held a national referendum (vote) on whether the UK should remain in the Eur...

A: The Brexit will have serious implications in terms of reduced trade of goods due to increased barrie...

Q: Why do economists and managers pay attention to the measurements of macroeconomic activity? several ...

A: Answer -  Economist and managers pay attention to many measurment of macroeconomics activity " GDP g...

Q: 1. Calculate the inflation rate. 2. Re-do parts b)-d), but use year 2 as the base year. How do your ...

A: Hi there! Thankyou for the question. As per the honor code, we are authorized to do one question at ...

Q: Firms A and B are contemplating whether or not to invest in R&D. Each has two options: “Invest” ...

A: Given information,The probability of investment that will invent product X is 0.5.Investment cost  =...

Q: plans are underway for a new stadium for a baseball team. City officials question the number and pro...

A: Break Even Point: It refers to the production point where the total revenue is equal exactly to the ...

Q: Joe mows lawns in his neighborhood for extra money. Suppose the demand for lawn mowing in​ Joe's nei...

A: Click to see the answer

Q: Suppose goods A and B are substitutes. If the price of good A increases, will the demand for good B ...

A: Substitute goods are those goods that can be consumed by an individual in place of each other by the...

Q: PE19   Determine whether each of the following would cause the economy’s PPF to shift inward, outwar...

A: Answer - Dera studentThank you for submitting your question.Since we only answerup to three sub part...

Q: Who was the President of the United States in 2008?

A: President of the United States in 2008 is George Walker Bush. He is 43rd president of the United Sta...

Q: A constitutional amendment has been proposed that would require Congress to balance the budget each ...

A: Balanced budget is when the government expenditures is equal to its revenue.It is not possible to ac...

Q: a) What are the determinants of production? Explain.b) Suppose that an economy’s production function...

A: The production function is a function that shows the relationship between output produced in an econ...

Q: Even with the new incentives for new insured enrollees to access primary care services there are mor...

A: The equilibrium in the market is obtained at the intersection of the demand and the supply curves in...

Q: 100 90 80 ATC 70 50 30 AVC 20 MC 10 + 0 0 5 10 15 20 25 30 35 40 45 50 QUANTITY (Thousands of pans) ...

A: In perfect competition we assume that the marginal cost curve is same as the supply curve. The below...

Q: draw graphs to illustrate the difference between a decrease in quantity supplied and a decrease in s...

A: The figure 1 shows decrease in quantity supplied and a decrease in supply for condominiums

Q: a.Explain in detail, what we could do to avoid each of those 5 factors causing our GDP growth rates ...

A: a) The factor that leads to Fall in GDP are as follows:Fall in Aggregate demand: The fall in aggrega...

Q: Explain on the impact of a drop in the discount rate on the supply of money in the market

A: The discount rate is the rate of interest related to the financial sector in the economy. The discou...

Q: In which of the following cases OLS estimation of Healthcare=a+bAge+u will be biased? a) Only includ...

A: To identify the case in which the OLS estimation of Healthcare=a+bAge+u will be biased

Q: What is macroeconomics?

A: Macroeconomics deals with hoe an economy work on the aggregate level and study economy-wide phenomen...

Q: Help Sav 0 Homework Saved The investment demand curve for a country is shown on the graph below. Sup...

A: The investment demand curve reflects a negative relationship between investment demand and interest ...

Q: Think about the market for parking spaces in downtown LA. There is little flexibility in terms of ch...

A: In the graph, the horizontal axis shows the quantity of the parking spaces and the vertical axis sho...

Q: Question 32 Consider a firm with production function f(L,K)=3L1/3K2/3. Assume that capital is fixed ...

A: The production function is the technical relation between the inputs used and the output produced. T...

Q: Positive externality No externality Negative externality Answer Bank The U.S. government decides to ...

A: Click to see the answer

Q: Now suppose people who had been seeking jobs become discouraged, and give up their job searches. The...

A: Click to see the answer