4. Duopoly quantity-setting firms face the market demand p = 150 – q1 – 92. Each firm has a marginal cost of $60 per unit a) What is the NE? b) What is the Stackelberg equilibrium when Firm 1 moves first?
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- Consider a two-firm duopoly facing a linear demand curve: P=1,600-Q. Assume MCA=MCB=AC=100 Where: P= Price Q= total output of the market, thus Q=QA+QB a. find the profit-maximizing output( cournot equilibrium output) b. find the cournot equilibrium price of firm A and firm B. 3. discuss how agricultural insurance could help farmers improve farm activity.Consider a duopoly with a demand curve given by P = a –bQ, where a and b are positive constants and Q is the total production by the two firms. Firms sell identical goods and have an identical constant marginal cost of production c. Fixed costs are equal to zero. We assume firms choose quantities simultaneously (Cournot competition). a. Obtain the first order condition of profit maximization for each firm. Use graphical analysis and economic intuition to explain what they represent. [30%] b. Obtain the profit maximizing quantity for each firm. Explain what they represent using game theory concepts. [20%] c. Demonstrate using relevant graphical analysis and economic intuition that the results obtained in b are not a Pareto Optimum for the firms involved. [20%] d. How would the graphical analysis in part a change if Firm A had a fixed cost of production?Consider a duopoly market with 2 firms. Aggregate demand in this market is given by Q = 500 – P, where P is the price on the market. Q is total market output, i.e., Q = QA + QB, where QA is the output by Firm A and QB is the output by Firm B. For both firms, marginal cost is given by MCi = 20, i=A,B. Assume the firms compete a la Cournot. 1. What are the equilibrium quantities? 2. What is the total quantity supplied on this market? 3. What is the equilibrium price in this market?
- Question 4 Consider a duopoly market with 2 firms. Aggregate demand in this market is given by Q = 500 – P, where P is the price on the market. Q is total market output, i.e., Q = QA + QB, where QA is the output by Firm A and QB is the output by Firm B. For both firms, marginal cost is given by MCi = 20, i=A,B. Assume the firms compete a la Cournot.Note that marginal revenue for both firms is given by MRA=500-2QA-QB, MRB=500-QA-2QB. Describe what a best-response curve is and how to find it. Derive the best-response function for each firm. What are the equilibrium quantities? What is the total quantity supplied on this market? What is the equilibrium price in this market?E1 Find Bertrand equilibrium and its outputs for the following asymmetric duopoly:q 1(p1, p2) = 16 - p1 + 0.5 p2, C1(q1) = 4q1;q 2(p1, p2) = 16 + 0.5 p1 - p2, C2(q2) = 6q2.(Note that the average and marginal costs are: AC1=MC1 = c1 = 4, AC2=MC2 = c2 = 6)Question 2 Consider a Cournot duopoly, the firms face an (inverse) demand function: Pb=268-10Qb. The marginal cost for firm 1 is given by mc1= 6Q The marginal cost for firm 2 is given by mc2=4Q (Assume firm 1 has a fixed cost of $102 and firm 2 had a fixed cost of $104 What are the profits of firm 2? (hint 567.26) How much consumer surplus is created by industry transactions? (hint 1333.34) Full explain this question and text typing work only We should answer our question within 2 hours takes more time then we will reduce Rating Dont ignore this line ...
- Consider the Cournot duopoly with linear demand function ? = 2000 − 2Q, where P is the price and Q = q1 + q2 is the total supply. Firm 1 and firm 2 has constant marginal cost of 600. Just answer the E, F and G, thank you bartleby! a. If firm compete in price, draw in detail the best response of each firm.b. Determine and explain the Bertrand equilibrium.c. What is the equilibrium quantity and how much profit for each firm?d. Explain the Bertrand Paradox in (c)!e. If firm 1 has capacity of production 450 and firm 2 has capacity of 200. Determine the Bertrand equilibrium.f. What is the equilibrium quantity, and how much profit for each firm?g. Is there any paradox in (f)?A community's demand for monthly subscription to a streaming music service is shown by the following table. Assume that there are only two firms serving this market (Firm A and Firm B), each firm offers the same quality of service and music selection, and that each firm’s marginal cost is constant and equal to 0 (zero). (please refer to table provided) If this market were highly competitive instead of a duopoly, the quantity of streaming movie subscriptions purchased each month would be ______ If the two firms agreed to each supply one half of the quantity a monopoly would supply, the contract would specify that each firm would supply ____Asap Three electricity generating firms are competing in the market with the inverse demand given by P(Q) = 20-Q. All firms have constant marginal costs. Firm 1's marginal cost is MC = 5; it has a capacity constraint of K1 = 5 units. Firm 2's marginal cost is MC = 8; it has a capacity constraint of K2 = 2.5 units. Firm 3's marginal cost is MC= 10; it has a capacity constraint of K3 = 2.5 units.A. The three firms compete in the style of Cournot. Please compute the Nash equilibrium quantities. Also compute the price in the Nash equilibrium.B. Which of these firms would have produced a larger quantity if it had a larger capacity? Please explain.
- Please solve D and E part only. Thankyou. Consider three firms, each with cost function C(qi)=4qi, currently competing Cournot. Market demand is P = 20 – Q. a. a. Find the quantities, price, and profits of each firm in equilibrium. b. Imagine firms1 and 2 merged to become one, so after the merger there are now two firms left in the market, firm 1&2 and firm 3. Assume there are no cost efficiencies expected and assume that the two firms play Cournot as before. Find the quantities, price, and profits of each firm in equilibrium c. Was it profitable for firms 1 and 2 to merge in the first place? d. Continuing with b., imagine that firms did not play Cournot after the merger, but rather that the merged firm 1&2 became a Stackelberg leader after the merger and firm 3 became the Stackelberg follower. If this were the case, find the quantities, price, and profits of each firm in equilibrium. e. Was it profitable for firms 1 and 2 to merge in the first place? Did price…Two firms engage in Cournot competition in the Everlasting Gobstopper industry. The price elasticity of demand is -2. Firm 1 has a constant marginal cost of $365.00 per unit, and firm 2 has a constant marginal cost of $602.25 per unit. If the two firms are currently in equilibrium, what is firm 2's share of the market? Enter your answer as a decimal, rounded to two places if necessary.Consider a COURNOT duopoly. Market demand is P(Q)=140-Q, and each firm faces a marginal cost of $20 per unit. Firm 1 has produced 43 and Firm 2 has produced 30. What is Firm 1's producer surplus?
