A homogeneous products duopoly faces a market demand function given byP = 300 − 3Q, where Q = Q1 + Q2. Both firms have a constant marginal cost MC =100. what is the profit-maximizing quantity?
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A homogeneous products duopoly faces a
P = 300 − 3Q, where Q = Q1 + Q2. Both firms have a constant marginal cost MC =100. what is the profit-maximizing quantity?
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- Consider a market where the inverse demand function is P = 100 - Q. All firms in the market have a constant marginal cost of $10, and no fixed costs. Compare the deadweight loss in a monopoly, a Cournot duopoly with identical firms, and a Bertrand duopoly with homogeneous products.A homogeneous product duopoly faces a market demand function given by p = 300 - 3Q,where Q = q1 + q2. Both firms have constant marginal cost MC = 100. What is the Bertrand equilibrium price and quantity in this market?Answer the given question with a proper explanation and step-by-step solution. Suppose we have a duopoly of a homogeneous product with demand Q = 10 – P/2. The cost function of each firm is C = 10 + q*(q+1).Determine the Cournot equilibrium price and quantity.
- Two identical firms currently serve a market. Each has a cost function of C(q) = 30q. Market demand is P(Q) = 80 − 0.01Q. The firms compete by setting prices simultaneously as in Bertrand competition. Let PB represent the equilibrium Bertrand duopoly price.The firms have proposed to merge, and they announce that this merger will result in considerable cost savings. The firms’ new cost function will have the form Cm(q) = cq + 100, 000. Note that the merged firm has positive fixed costs while the unmerged firms do not. (a) What is the merged firm’s profit-maximizing price if the merger is approved? Is it possible for the cost savings (via c < PB) to be sufficiently large for the merged firms’ profit-maximizing price to be below the duopoly equilibrium price? (b) Suppose that the Department of Justice permits the merger with the requirement that the new (post-merger) price must be no greater than the pre-merger price. Under what circumstances are the firms willing to go through with…The inverse market demand in a homogeneous-product Cournot duopoly is P = 100 – 2(Q1 + Q2) and costs are C1(Q1) = 20Q1 and C2(Q2) = 30Q2. a. What is the reaction function for each firm? b. What is each firm’s equilibrium output? c. What is the equilibrium market price? d. What is the profit each firm earns in equilibrium?The market demand in a homogeneous-product Cournot duopoly is P = 100 - 2Q, where Q=Q1+Q2 (Firm 1 and Firm 2), and the costs functions for each firms are: TC1 = 12Q1 and TC2 = 20Q2. Instructions: Use no decimals. Use the average cost to calculate monopoly profits. Do not round if values are used to complete other calculations. Complete the following table. Q1 Q2 P Profits F1 Profits F2 Duopoly competition Collusion
- The inverse demand for a homogeneous-product Stackelberg duopoly is P = 12,000 −5Q. The cost structures for the leader and the follower, respectively, are CL(QL) = 4,000QL and CF (QF) = 5,000QF.a. What is the follower’s reaction function? QF = − QLb. Determine the equilibrium output level for both the leader and the follower.Leader output: Follower output: c. Determine the equilibrium market price. $ d. Determine the profits of the leader and the follower.Leader profits: $ Follower profits: $Consider a Stackelberg duopoly with the following inverse demand function: P = 100-2Q₁-2Q₂. The firms' marginal costs are identical and are given by MCi = 2. Based on this information, the Stackelberg leader's marginal revenue function is Multiple Choice a)MR(Q ₂) =100-2Q₂ + c1/2. b) MR(Q ₂)= 100-Q₂+ c2/2. c)MR(Q₁) = 50-2 Q₁ + c2/2. d)MR(Q₁) = 50-2Q₂ + c 1/2.Consider a market that is a Bertrand oligopoly with 5 firms in the market. Each of these firms produce an identical product and each have the same cost function of C(Q) = 80Q. The inverse market demand for this product is P = 2480 – 2Q. What is the equilibrium market price?
- The inverse demand for a homogeneous-product Stackelberg duopoly is P = 16,000 − 4Q. The cost structures for the leader and the follower, respectively, are CL(QL) = 4,000QL and CF(QF) = 6,000QF. a. What is the follower’s reaction function? b. Determine the equilibrium output level for both the leader and the follower. c. Determine the equilibrium market price. d. Determine the profits of the leader and the follower.Consider a market that is a Bertrand oligopoly with 5 firms in the market. Each of these firms produce an identical product and each have the same cost function of C(Q) = 80Q. The inverse market demand for this product is P = 2480 – 2Q. How much does EACH firm produce at the equilibrium price?The market demand in a homogeneous-product Cournot duopoly is P = 100 - 2Q, where Q = Q1 + Q2 (Firm 1 and Firm 2), and the costs functions for each firms are: TC1 = 12Q1 and TC2 = 20Q2. Instructions: Use no decimals. Use the average cost to calculate monopoly profits. Do not round if values are used to complete other calculations. Complete the following table. Q1 Q2 P Profits F1 Profits F2 F1 cheats w/ QDC, F2 colludes F1 cheats w/ QBRF, F2 2 colludes
