3. Consider two firms producing differentiated products and competing on price choice. Their demand functions are given below 9, = 40 – 2 p, + P2 q2 = 40 – 2 pz + P, Their total costs are given as; TC, = 10g, TC, =10q; %3D
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- If there are two firms Atlas and Bowden in this market with the total cost function TC = 500 + 10Q^2 and they engage in Cournot competition, what is each firm's equilibrium quantity, price, and profit? [NB: round quantities to nearest integer to find equilibrium quantity, price, and profit]Two ready-to-eat breakfast cereal manufacturers, Lots of Sugar and Buckets of Goo, face combined demand for their products given by Q = 75 - P. Their total costs are given by TCLots of Sugar = 0.1Q2Lots of Sugar and TCBuckets of Goo = 5QBuckets of Goo. If they successfully collude, their total profits will be: a. $62.50 b. $1,250.00 c. $125.00 d. $287.50 e. $1,287.501. Two firms compete in a market to sell a homogeneous product with inversedemand function P = 960-6Q. Each firm produces at a constant marginal cost of$60 and has no fixed costs.a. Assuming perfect competition, computei. Equilibrium price and quantityii. Profits and producer surplusiii. Consumer surplus and total surplusb. Assuming Cournot duopoly, computei. Reaction functions for each firmii. Profits of each firmiii. Consumer surplusiv. Total welfare loss relative to perfect competition (if any)c. Assuming the firms collude and act as a monopolist, computei. Equilibrium price and quantityii. Total profitsiii. Consumer surplusiv. Total welfare loss relative to perfect competition (if any)d. Rank the output quantities, profits, and total welfare by the three marketstructures above
- There are two ma jor producers of corncob pipes in the world, both located in Herman, Missouri. Suppose that the inverse demand function for comcob pipes is described by p = 120 4q where q is total industry output and suppose that marginal costs are zero. What is the Cournot reaction function of firm 1 to the output, q2, of firm 2? (a) 120-4q22Consider a market with two identical firms: Firm A and Firm B. • The market demand is P = 340 – 2Q, where Q = qA + qB and the firms cost structure is such that MCA = ACA = 40 and MCB = ACB = 35. Determine the Cournot-Nash quantities, market price, and profits for each firm. (Use many decimal places in your calculations, but round your final answers to 2 decimal places.) (a) qA = qB = (B) P = (C) πA = (D) πB =A homogeneous products duopoly faces a market demand function given byP = 300 − 3Q, where Q = Q1 +Q2. Both firms have constant marginal cost MC =100.a) What is Firm 1’s profit-maximizing quantity, given that Firm 2 produces an output of 50 unitsper year?
- A10 Consider an industry with 2 firms, each firm with marginal costs equal to 0. Market demand curve is given by Q=60- P. With 2 firms, we can write Q=Q1+ Q2 . Suppose that each firm behaves as a “Cournot” competitor, that is, choose the optimal quantity maximizing the profits in a strategic way.(a) What would be the values of Q1, and Q2 in equilibrium? (b) Suppose firm 1 can “commit” its level of output in advance. In other words, if firm 1 announces to produce Q1, firm 2 needs to decide how much to produce assuming that firm 1 would indeed produce Q1. What’s the level of Q1 firm 1 would choose to maximize its profit?You are the manager of Taurus Technologies (Firm 1), and your sole competitor is Spyder Technologies (Firm 2). The two firms’ products are viewed as identical by most consumers. The relevant cost functions are C(Q1) = 120 + 8Q1 and C(Q2) = 120 + 12Q2, and the market demand curve for this unique product is given by P = 160 – 2.5Q. Given this information, the profits for firm 1 are = $__. Give typing answer with explanation and conclusion1. if the total cost function for this market is TC = 500 + 10Q2 , calculate the total and marginal costs for each of the quantities in the table. what is the demand function for this market? 2. What are the profit-maximizing quantity, price, and profit for this market? 3. If there are two firms Atlas and Bowden in this market with the same earlier total cost function and they engage in Cournot competition, what is each firm's equilibrium quantity, price, and profit? [NB: round quantities to nearest integer to find equilibrium quantity, price, and profit]
- Exercise 13.2. A homogeneous products duopoly faces a market demand function given byP = 300 − 3Q, where Q = Q1 +Q2. Both firms have constant marginal cost MC =100.a) What is Firm 1’s profit-maximizing quantity, given that Firm 2 produces an output of 50 unitsper year?There are only two driveway paving companies in a small town, Asphalt, Inc. and Blacktop Bros. The inverse demand curve for the services is ? = 2040 − 20?where quantity is measured in pave jobs per month and price, in dollars per job. The firms have an identical marginal cost of $200 per driveway. If the two firms collude, splitting the work and profits evenly, how many driveways will each firm pave, and at what price? How much profit will each firm make? Does Asphalt have an incentive to cheat by paving one more driveway each month? Show it numerically.Ch 24 Economics If there are two firms Atlas and Bowden in this market with the same earlier total cost function of TC = 500 + 10Q^2 , demand function of P(q)= 220-10q and they engage in Cournot competition, what is each firm's equilibrium quantity, price, and profit? [NB: round quantities to nearest integer to find equilibrium quantity, price, and profit