Consider the quantity competition between two firms, A and B, in 380 — 2QA - Qв, where P denotes the market price, QA denotes the quantity supplied by firm A, and QB denotes the quantity supplied by firm B. The per-unit production cost of firm A is 20, and the per-unit production cost of firm B is 26. Each of the two firms simultaneously decides its own quantity to maximize its own 1. a market with inverse demand function P profit. (a) Derive the best-response functions for the two firms. (b) Find the Nash equilibrium and draw a graph to illustrate.
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- A market consists of a dominant firm and a number of fringe firms. The followings are the information about these firms. Total market demand: QALL=300 – (2.5) P The competitive fringe supply function (total): QF=2P-12 The dominant firms marginal cost function: MC = 12 + (1⁄2) QD. a) What is the equilibrium price set by the dominant firm? b) How much will the competitive fringe supply to the market at the price found in question (a)? Show the answers graphically.A market consists of a dominant firm and a number of fringe firms. The followings are the information about these firms. Total market demand: QALL=300 – (2.5)P The competitive fringe supply function (total): QF=2P-12 The dominant firms marginal cost function: MC = 12 + (1⁄2)QD. What is the equilibrium price set by the dominant firm? Calculate the total market demand at the price found in question 2(a). How much will the competitive fringe supply to the market at the price found in question 2(a)? How much will the dominant firm supply to the market at the price found in question 2(a)? 5. Show the above answers graphically.A market consists of a dominant firm and a number of fringe firms. The followings are the information about these firms. Total market demand: QALL=300 – (2.5) P The competitive fringe supply function (total): QF=2P-12 The dominant firms marginal cost function: MC = 12 + (1⁄2) QD. a) What is the equilibrium price set by the dominant firm? b) Calculate the total market demand at the price found in question (a). c) How much will the competitive fringe supply to the market at the price found in question (a)? d) How much will the dominant firm supply to the market at the price found in question (a)? Show the answers graphically.
- A market consists of a dominant firm and a number of fringe firms. The followings are the information about these firms. Total market demand: QALL=300 – (2.5) P The competitive fringe supply function (total): QF=2P-12 The dominant firms marginal cost function: MC = 12 + (1⁄2)QD. a) What is the equilibrium price set by the dominant firm? Calculate the total market demand at the price found. b) How much will the competitive fringe supply to the market at the price found in question 2(a)? c) How much will the dominant firm supply to the market at the price found in question 2(a)? d) Show the above answers graphically.The market demand and supply function for Pizza in New Town were: Qd = 10,000 – 100P Qs = - 2,000 + 100P A. Determine the equilibrium price and quantity of the Pizza. B. Plot the market and demand curves, label the equilibrium point E, and draw the demand curve faced by a single Pizza shop in this market on the assumption that the market is perfectly competitive. Show also the marginal revenue of the firm on the figure. C. If the total cost function of the firm is TC = 500 + 2Q + Q2, determine the price-quantity combination that will maximize the firm’s profit. D. Determine the profit. What adjustments should be anticipated in the long run?A market consists of a dominant firm and a number of fringe firms. The followings are the information about these firms. Total market demand: QALL=300 – (2.5) P The competitive fringe supply function (total): QF=2P-12 The dominant firms marginal cost function: MC = 12 + (1⁄2) QD. a) What is the equilibrium price set by the dominant firm? b) How much will the dominant firm supply to the market at the price found in question (a)? Show the answers graphically
- A market consists of a dominant firm and a number of fringe firms. The followings are the information about these firms. Total market demand: QALL=300 – (2.5) P The competitive fringe supply function (total): QF=2P-12 The dominant firms marginal cost function: MC = 12 + (1⁄2) QD. a) What is the equilibrium price set by the dominant firm? b) Calculate the total market demand at the price found in question (a). Show the answers graphically.Consider a single country and a single good. The demand curve for this good is given by QD = 144 - 4P. Thereare two firms serving the market: Firm A and Firm B, where Firm A has a marginal cost of $20 and Firm B hasa marginal cost of $16. There are no fixed costs incurred by either firm. Assume that these firms compete in Bertrand fashion. Part V. What is the equilibrium price in the market now? Explain your reasoning. Part VI. How many units of output each firm produces? Show your work. Part VII. How much profit each firm makes now? Show your work. Part VIII. What is the consumer surplus? Show your work. Part IX. Under which competition, Cournot vs. Bertrand, social welfare is higher? Show your work.There are two firms selling differentiated products. Firm A faces the following demand for his product: QA=20-1/2PA+1/4PB Firm B faces the following demand: QB=220-1/2PB+1/4PA PA represents the price set by firm A. PB represents the price set by firm B.Assume that the marginal cost is zero both for firm A and firm B.What are the equilibrium prices of a simultaneous price competition?What would the equilibrium prices be if A is the leader and B is the follower?
- PROBLEM (5) (In a market with demand Q = 780 - p, there are 3 identical firms, A, B and C; each with a total cost function TC(Q) = 3(Q)^2. Calculating the market price under each of the 2 scenarios below, rank/order the Consumer Surplus in each scenario (don’t calculate each CS; just rank them); (i) B and C jointly form the fringe supply and A is the dominant firm in the dominant firm model. (ii) They act as perfectly competitive firms -as if trying to maximize total surplus and minimize DWL- that is, their joint MC serves as the “market supply” for the competitive market. Please answer all the parts!Suppose that a firm produces identical commodities and sell them in two separate markets charging two different prices. The demand for the commodity in two markets are (1) P1 = 100 - Q1 and (2) P2 = 80 - Q2, where P1 and P2 are the price of the product that the firm charges, while Q1 and Q2 are demand in each market. Suppose that the firm's cost of production is C(Q) = 6Q. (1) What is the firm's total profit function in terms of the quantity of output? How much should this firm sell each product in two separate markets to maximize total profits?Consider a single country and a single good. The demand curve for this good is given by QD = 144 - 4P. Thereare two firms serving the market: Firm A and Firm B, where Firm A has a marginal cost of $20 and Firm B hasa marginal cost of $16. There are no fixed costs incurred by either firm. Assume that these firms compete in Cournot fashion. Part I. How many units of output each firm produces? Show your work. Part II. What is the equilibrium price in the market? Show your work.Part III. How much profit each firm makes? Show your work. Part IV. What is the consumer surplus? Show your work.