A small town has two bakeries, Acme and Fat Apple. Acme's marginal cost to make a loaf of bread is $1 and Fat Apple's marginal cost is $2. Acme's demand function is given as Q₁ = 14-P₁ -0.5P2 and Fat Apple's demand function is Q2 = 19-0.5P₁ P2 where P₁ (P₂) is Acme (Fat Apple)'s price in dollars per loaf of break and Q₁ (Q2) is measured in thousand loaves of Amce (Fat Apple)'s bread (respectively). Find Nash equilibrium prices. O O O P1 5.5 and P2 -9. P1 = 4.4 and P2-8.2. P15.2 and P2 - 9.2. P110.2 and P2 = 9.2.
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- Hubert owns a plot of land in the desert that isn't worth much. One day, a giant meteorite falls on his property, making a large crater. The event attracts scientists and tourists, and Hubert decides to sell nontransferable admission tickets to the meteor crater to both types of visitors: scientists (Market A) and tourists (Market B). The following graphs show daily demand (D) curves and marginal revenue (MR) curves for the two markets. Hubert’s marginal cost of providing admission tickets is zero Suppose that at first, Hubert charges the same price of $8 per admission in both markets so that the total number of admissions demanded is_______tickets. Suppose now that Hubert decides to charge a different price in each market. To maximize revenue, Hubert should charge_________per admission in Market A and________per admission in Market B. At these prices, he will sell a total quantity of __________admission tickets per day. Complete the following table by calculating…There are two firms in the pumpkin industry: C and S. The demand function for pumpkins is q = 3, 200 - 1, 600p. The total number of pumpkins sold at the market is q = qC + qS, where qC is the number that C firm sells and qS is the number that S firm sells. The cost of producing pumpkins for either firm is $0.50 per pumpkin no matter how many pumpkins they produces. 1. Every spring, each of the firms decides how many pumpkins to grow. They both know thelocal demand function and they each know how many pumpkins were sold by the other firmlast year. In fact, each firm assumes that the other firm will sell the same number this year asits sold last year. So, for example, if firm S sold 400 pumpkins last year, firm C believes thatfirm S will sell 400 pumpkins again this year. If firm S sold 400 pumpkins last year, what doesfirm C think the price of pumpkins will be if firm C sells 1,200 pumpkins this year? 2. If firm S sold 400 pumpkins last year, firm C believes that if he sells qtCpumpkins…Suppose you are the marketing manager for Fruit of the Loom. An individual's inverse demand for Fruit of the Loom women's underwear is estimated to be P = 25 − 3Q (in cents). If the cost to Fruit of the Loom to produce an item of women's underwear is C(Q) = 1 + 4Q (in cents), compute the profit Fruit of the Loom will earn by charging the optimal block price. a. $108.50 b. $0.73 c. $1.37 d. $136.50
- Price-discriminating firm Cho owns a plot of land in the desert that isn’t worth much. One day, a giant meteor falls on her property. The event attracts scientists and tourists, and Cho decides to sell nontransferable admission tickets to the meteor crater to both types of visitors: scientists (Market A) and tourists (Market B). The following graphs show demand (D) curves and marginal revenue (MR) curves for the two markets. Cho’s marginal cost of providing admission tickets is zero. I hope you can see a clear picture.Suppose that Sony Corporation has developed a new all in one, easy to use, big screen computer / TV (‘BCTV’). This BCTV is unique in the market and Sony estimates that the demand for this new BCTV is: P = 13 – Q, where P is in thousands of dollars and Q is in thousands of BCTVs. The total cost of producing the BCTV is given by TC = 2 + 7Q where TC is in thousands of dollars. Samsung is considering entering the same market with its own BCTV and faces the same cost curve as Sony. Currently Sony has the capacity to produce 2000 units (i.e., Q = 2). Sony is considering whether to expand its capacity to produce 4000 units (i.e., Q = 4). This would double fixed costs for Sony. Samsung would enter the market with 2000 units of capacity if they entered the market. Both firms plan to use all of their capacity and sell at the resulting market price. a. Construct the payoff matrix for this game b. Does either firm have a dominant strategy? c. What is the Nash equilibrium? d. If Sony…AOF is the only firm selling beer around Isla Vitas, which has a beer fountain in the backyard so the marginal cost of producing beer is 0. There are two groups of consumers: students and non students. The students' beer inverse demand function is p=50-5q, and the non-students' beer inverse demand function is p=10-2q. AOF sells beer in two sizes: 10 ounces bottle and 5 ounces can. Due to a local act, the consumers can only buy either 1 bottle or 1 can of beer. AOF can charge different prices on each bottle and each can of beer, while it cannot tell whether a customer is a student or not. In order to maximize the profits, how much should AOF charge its 10 ounces bottle? Answer: 87.5
- Suppose the market for coffee is characterized by perfect competition. Assume that all firms are identical.The long run average total cost (LATC) and long run Marginal cost function (LMC) functions for arepresentative firm are given as: LATC = Q + 5 + 25/Q and LMC = 2Q + 5. Total demand from all consumers in this market is given by P = 500 – Q What quantity will a firm produce in the long run?a. 10 unitsb. 15 unitsc. 20 unitsd. Zero unitse. 5 units 2. What is the price that each firm will change in the long run?a. $15b. $20c. $30d. $40e. $50 How many units will be traded in the market in the long run?a. 1000b. 970c. 950d. 900e. 485Carl and Simon are two pumpkin growers who are the only sellers of pumpkins at the market. The demand function for pumpkins is Q = 8,400 - 800P, where Q is the total number of pumpkins that reach the market and P is the price of pumpkins. Suppose further that each farmer has a constant marginal cost of $.50 for each pumpkin produced. If Carl believes that Simon is going to produce Qs pumpkins this year, then the reaction function tells us how many pumpkins Carl should produce in order to maximize his profits. Carl’s reaction function is QCarl = Group of answer choices a. 2,000 - Qs/2. b. 8,400 - 800Qs. c. 8,400 - 1,600Qs. d. 4,000 - Qs/2. e. 6,000 - Qs.A6 In Changlun, Kedah, there are two bakers, Abu and Bakar. Their bread taste the same and nobody can tell the difference. Abu has constant marginal costs of RM1 per loaf of bread. Bakar has constant marginal costs of RM2 per loaf. Fixed costs are zero for both of them. The inverse demand function for bread in Changlun is p(q) = 6 – 0.01(qA + qB), where q is the total number of loaves sold per day. Find the reaction function for Abu and Bakar. What is the Cournot Nash equilibrium number of loaves of bread for each baker?
- A manufacturer of mountain bikes has the following marginal cost function: C′(q)=700/0.5q+2 where qq is the quantity of bicycles produced. When calculating the marginal revenue and marginal profit in this problem, use the approach given for the marginal cost and marginal revenue in the discussions in your textbook. a) If the fixed cost in producing the bicycles is $3200, find the total cost to produce 35 bicycles.Answer: $ b) If the bikes are sold for $250 each, what is the profit (or loss) on the first 35 bikes?Answer: $ c) What is the marginal profit on bike number 36?Answer: $Suppose that each firm in a competitive industry has the following costs: Total Cost: TC=50+12q2TC=50+12q2 Marginal Cost: MC=qMC=q where qq is an individual firm's quantity produced. The market demand curve for this product is: Demand QD=140−2PQD=140−2P where PP is the price and QQ is the total quantity of the good. Each firm's fixed cost is . What is each firm's variable cost? 50+12q50+12q 12q12q qq 12q212q2 Which of the following represents the equation for each firm's average total cost? 50q+12q50q+12q 50q50q 50+12q50+12q 12q12q Complete the following table by computing the marginal cost and average total cost for qq from 5 to 15. q Marginal Cost Average Total Cost (Units) (Dollars) (Dollars) 5 12.50 6 11.33 7 10.64 8 10.25 9 10.06 10 10.00 11 10.05 12 10.17 13 10.35 14 10.57…The soluation avilible I believe it is wrong so please solve it carefully Carl and Simon are the only sellers of pumpkins at the market, where the total demand function for pumpkins is q =3 ,200−1,600p. The total number of pumpkins sold at the market is q = qC + qS, where qC is the number that Carl sells, qS is the number that Simon sells. The cost of producing pumpkins for each farmer is $.50 per pumpkin; the fixed costs are zero. .a. Find the Cournot equilibrium price and quantities. .b. Find the Bertrand equilibrium price and quantities. . .c. Suppose now that every spring the snow thaws off of Carl’s pumpkin field a week before it thaws off of Simon’s. Therefore, Carl can plant his pumpkins one week earlier than Simon while predicting Simon’s choice based on the previous year information. Simon observes Carl’s choice and chooses how much pumpkin to plant. Find the new equilibrium price and quantities. .d. Compare the quantities and prices in parts a, b, and c. Rank these outcomes…