A duopoly faces an inverse market demand of P(Q) = 240−Q. Firm 1 has a constant marginal cost of MC1 (q1) = $10. Firm 2's constant marginal cost is MC2 (q2) = $20. Assume fixed costs are negligible for both firms. Calculate the output of each firm, market output, and price if there is (A) a collusive equilibrium or (B) a Cournot equilibrium. (A) Collusive equilibrium (Enter your responses rounded to two decimal places) The collusive equilibrium occurs where q1 equals ? and q2 equals ? Market output is ? The collusive equilibrium price is ? (B) Cournot equilibrium (Enter your responses using rounded to two decimal places) The Nash-Cournot equilibrium occurs where q1 equals ? and q2 equals ? Market output is ? The equilibrium occurs at a price of ?
A duopoly faces an inverse market demand of P(Q) = 240−Q. Firm 1 has a constant marginal cost of MC1 (q1) = $10. Firm 2's constant marginal cost is MC2 (q2) = $20. Assume fixed costs are negligible for both firms. Calculate the output of each firm, market output, and price if there is (A) a collusive equilibrium or (B) a Cournot equilibrium. (A) Collusive equilibrium (Enter your responses rounded to two decimal places) The collusive equilibrium occurs where q1 equals ? and q2 equals ? Market output is ? The collusive equilibrium price is ? (B) Cournot equilibrium (Enter your responses using rounded to two decimal places) The Nash-Cournot equilibrium occurs where q1 equals ? and q2 equals ? Market output is ? The equilibrium occurs at a price of ?
Chapter15: Imperfect Competition
Section: Chapter Questions
Problem 15.4P
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A duopoly faces an inverse market demand of P(Q) = 240−Q.
Firm 1 has a constant marginal cost of MC1 (q1) = $10.
Firm 2's constant marginal cost is MC2 (q2) = $20.
Assume fixed costs are negligible for both firms. Calculate the output of each firm, market output, and price if there is (A) a collusive equilibrium or (B) a Cournot equilibrium.
Firm 1 has a constant marginal cost of MC1 (q1) = $10.
Firm 2's constant marginal cost is MC2 (q2) = $20.
Assume fixed costs are negligible for both firms. Calculate the output of each firm, market output, and price if there is (A) a collusive equilibrium or (B) a Cournot equilibrium.
(A) Collusive equilibrium (Enter your responses rounded to two decimal places)
The collusive equilibrium occurs where q1 equals ?
and q2 equals ?
and q2 equals ?
Market output is ?
The collusive equilibrium price is ?
(B) Cournot equilibrium (Enter your responses using rounded to two decimal places)
The Nash-Cournot equilibrium occurs where q1 equals ?
and q2 equals ?
Market output is ?
The equilibrium occurs at a price of ?
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