HANDWRITTEN ONLY... do it as quick as possible needed urgently... Consider the following oligopolistic market. In the first stage, Firm 1 chooses quantity q₁. Firms 2 and 3 observe Firm 1's choice, and then proceed to simultaneously choose 92 and 93, respectively.Market demand is given by p(Q) = 100 - Q, and Q = 9₁ +92 +93. Firm 1's costs are c₁ (91) = 6q₁, firm 2's costs are c₂ (92) = 592 and firm 3's costs are c3(93) = 593.Starting from the end of the game, you can express Firm 2's best response function in terms of 9₁ and 93, and you can similarly express Firm 3's best response function in terms of q₁ and 92. Using these, answer thefollowing questions.If rounding is needed, write your answers to 3 decimal places.a) If Firm 1 chooses q₁ = 12, what quantity will Firm 2 choose?b) If Firm 1 chooses q₁ = 100, what quantity will Firm 2 choose?c) In the subgame perfect Nash equilibrium of this game, firm 1 produces what quantity?d) In the subgame perfect Nash equilibrium of this game, firm 2 and firm 3 each produce what quantity?

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a) If Firm 1 chooses q₁ = 12. what quantity will Firm 2 choose? b) If Firm 1 chooses q₁ = 100, what quantity will Firm 2 choose?

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter12: Price And Output Determination: Oligopoly

Section: Chapter Questions

Problem 2E

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Question

HANDWRITTEN ONLY... do it as quick as possible needed urgently...

Consider the following oligopolistic market. In the first stage, Firm 1 chooses quantity q₁. Firms 2 and 3 observe Firm 1's choice, and then proceed to simultaneously choose 92 and 93, respectively.
Market demand is given by p(Q) = 100 - Q, and Q = 9₁ +92 +93. Firm 1's costs are c₁ (91) = 6q₁, firm 2's costs are c₂ (92) = 592 and firm 3's costs are c3(93) = 593.
Starting from the end of the game, you can express Firm 2's best response function in terms of 9₁ and 93, and you can similarly express Firm 3's best response function in terms of q₁ and 92. Using these, answer the
following questions.
If rounding is needed, write your answers to 3 decimal places.
a) If Firm 1 chooses q₁ = 12, what quantity will Firm 2 choose?
b) If Firm 1 chooses q₁ = 100, what quantity will Firm 2 choose?
c) In the subgame perfect Nash equilibrium of this game, firm 1 produces what quantity?
d) In the subgame perfect Nash equilibrium of this game, firm 2 and firm 3 each produce what quantity?

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Consider the following oligopolistic market. In the first stage, Firm 1 chooses quantity q₁. Firms 2 and 3 observe Firm 1's choice, and then proceed to simultaneously choose q2 and 93, respectively. Market demand is given by p(Q) = 100 – Q, and Q = 9₁ +9₂ +93. Firm 1's costs are c₁ (9₁) = 1q₁, firm 2's costs are c₂(9₂) = 6q2 and firm 3's costs are C3(93) = 693. Starting from the end of the game, you can express Firm 2's best response function in terms of 9₁ and 93, and you can similarly express Firm 3's best response function in terms of q₁ and q₂. Using these, answer the following questions. a) If Firm 1 chooses q₁ = 9, what quantity will Firm 2 choose? b) If Firm 1 chooses q₁ = 100, what quantity will Firm 2 choose? c) In the subgame perfect Nash equilibrium of this game, firm 1 produces what quantity? d) In the subgame perfect Nash equilibrium of this game, firm 2 and firm 3 each produce what quantity?
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