For a Cournot oligopoly model with n firms facing constant marginal costs c, and market demand P = 1 - Q. where Q is the total quantity demanded in the market, the equilibrium quantity for each firm will be O (1-c)/(n+1) O (1+c)/(n+1) O (1+cn)/(n+1) O (1-cn)/(n+1)
Q: Part 3: Again consider the market for skis. a. If the price floor is $80, what is the CS, PS, TS,…
A: Price control refers to government legislation aimed at limiting or regulating the prices of goods…
Q: Use the process of comparative statics to analyse the following changes in market conditions for the…
A: Demand is defined as the willingness of a consumer to buy something, whereas supply is the total…
Q: Quantity What is the amount of producer surplus after the governa
A: Equilibrium in the market occurs at the intersection of market demand and market supply curve. The…
Q: Referring to the concept of an "invisible hand" allocating resources across industries in response…
A: The concept of the "invisible hand" is a central idea in economics that was first introduced by Adam…
Q: Assume a two-sector economy model is given by: Y = C + I, C = 97 + 0.7Y, I = 180 –…
A: “Since you have posted multiple questions, we will provide the solution only to the specified…
Q: Question 4 is the benefit that customers receive from a good or service when others also are using…
A: Benefit reffers to the advantage or usefullness comes from by using a service or a product. It is…
Q: Say that the bundle of goods purchased by a typical consumer in the base year consisted of 20…
A: A price index is a statistic that compares a specific period's average price of a basket of goods…
Q: Select all the items which would be counted in US GDP 2015 from the list below: Select all the…
A: Gross domestic product refers to the total market value of goods and services produced domestically…
Q: Your sister’s utility function over the 2 goods X and Y is defined by: U (X,Y) = XY +4Y a. If…
A: The utility function is the mathematical depiction of the welfare or satisfaction derived from the…
Q: Labor (workers/day) Output (units/day) Total fixed cost ($/day) Total variable cost ($/day) Total…
A: Total cost is the sum of fixed cost and variable cost. Fixed cost are the cost that is fixed and…
Q: Assume the following utility functions: U₁= x2/3 and U₂ = x 1. What is the marginal utility of both…
A: Utility function and marginal utility: The utility function refers to all those commodity bundles…
Q: Your company has just signed a three-year nonrenewable contract with the city of New Orleans for…
A: EUAC refers to the discounted annual worth of a future cash flow .
Q: A company wants to issue a coupon for a product. The marginal cost of the product is $1. If the…
A: Lerner index states the relationship among profit-maximizing price, marginal cost, and elasticity of…
Q: what is Mexico Governance and Aid?
A: Since Mexico is a federal presidential representative democratic republic, president also serves as…
Q: Which normal form game best represents split or steal? (Careful, these are very similar - check that…
A: In game theory, a normal form game, also known as a strategic form game, is a mathematical…
Q: A monopolist has estimated that IF he enters an industry, he will have fixed costs of $600 and…
A: Incase of monopoly, There exists a single seller. The demand curve faces by the monopolist is…
Q: give a suppl fuction s(q)=q^(2)+2q and demand function D(q)=1672-4q where q reprsents the quantty of…
A: Demand Function : D(q) : P=1672-4q Supply Function : S(q) : P=q2+2q Equilibrium is a market state…
Q: Banks in New Transylvania have a desired reserve ratio of 10 percent of deposits and no excess…
A: The financial services sector known as banking includes institutions that accept deposits, lend…
Q: Suppose that the price of a ride is $12. Then Angela buys 8 rides a month. Suppose her demand curve…
A: Consumer Surplus is the measure of the difference between the highest price a consumer is willing to…
Q: Give typing answer with explanation and conclusion Which products are most likely to be most price…
A: Price elasticity of demand measures the percentage change in quantity demanded of a good or service…
Q: Assuming that the price of an ice cream sandwich is $4, then Jason's income is Jason's preferences…
A: A budget constraint illustrates the combination of two goods that can be purchased by consumer,…
Q: Find an illustration or graph that identifies the different phases of the business cycle. Thereafter…
A: The business cycle refers to the natural rise and fall of economic activity over time. It typically…
Q: Make diagrams to support your answer. Beginning in 2022 central banks worldwide began to respond to…
A: Introduction Banks will raise rates of interest to motivate consumers to spend fewer dollars and…
Q: 1. What is CPI? How to calculated CPI? How to find out inflation based on CPI. = Year Year 1 Year 2…
A: CPI is the consumer price index. CPI includes the goods and services consumed by a typical…
Q: 5. The following diagram displays isoquants for different combinations of labor and capital. To…
A: A constant rate of return refers to a steady and unchanging rate of profit or interest earned on an…
Q: Give typing answer with explanation and conclusion Which of the following illustrates goods…
A: goods market The market for physical commodities, such as food, clothing, and technology, is…
Q: 7. Short-run and long-run effects of a shift in demand Suppose that the jackfruit industry is…
A: Given information: Suppose that the jackfruit industry is initially operating in long-run…
Q: Colombia is the world’s biggest producer of roses. The global demand for roses increases and at the…
A: Exchange rate: The value of one currency in another currency's terms is known as the nominal…
Q: This week Sara’s income falls from $12 to $9 a week, while the price of popcorn is unchanged at $3 a…
A: The premise behind consumer choice is that customers would make reasonable selections to meet their…
Q: Only typed answer over the last 50 years, in the united states the labor force participation rate…
A: Labour force participation refers to the percentage of working age population that is in the labor…
Q: Next, we want to understand some of the mechanisms that can shape the behaviour of negotiators at…
A: With "Polluting technology" the profit of the firm is = $11 With "Clean Technology" the expected…
Q: Decision Alternative Up S₁ Stable s2 Down S3 Investment A, d₁ Investment B, d₂ Investment C, d3…
A: The expected utility approach is a decision-making method that involves calculating the expected…
Q: 1) What are the Nash equilibria? Which one is unreasonable/non-credible threat?
A: Disclaimer- “Since you have asked multiple question, we will solve the first question for you as per…
Q: Assume that in the base year (2008), a country's nominal GDP is 10,000 billion dollars. The country…
A: Gross domestic product (GDP) measures the market value of final goods and services produced under a…
Q: Calculate Madison's marginal revenue and marginal cost for the first seven cardigans they produce,…
A: Profit maximizing quantity is computed where MR=MC or the profit is maximum. For the price given:…
Q: Consider an economy with two types of firms, S and I. S firms all move together. I firms move…
A: * SOLUTION :- Based on the above information the calculation is given below
Q: What is the first item to identify when determining the short-run equilibrium for a monopolistically…
A: In a monopolistic competitive market, there are many firms with free entry and exit. Firms sell…
Q: Consider the Economist article: "Wild Horses" April 20th 2011…
A: An economic challenge is a circumstance or problem that prevents an economy from operating,…
Q: This week Sara’s income falls from $12 to $9 a week, while the price of popcorn is unchanged at $3 a…
A: Relative price is the price of one good measures in terms of other good. Real income is calculated…
Q: anks in New Transylvania have a desired reserve ratio of 10 percent of deposits and no excess…
A: The financial services sector known as banking includes organizations that take deposits, lend…
Q: A company wants to issue a coupon for a product. The marginal cost of the product is $1. If the…
A: Given information: A company wants to issue a coupon for a product. The marginal cost of the product…
Q: Graphs and Charts Cass and Kyon visualize data in many different ways, but the graphs or charts they…
A: An economics graph is a visual illustration of numerical data in economics. It helps economists for…
Q: Suppose, the demand and supply curve in a US manufacturing firm are provided as follows: ES = 20 +…
A: The labor demand and supply in the US manufacturing firm: ES = 20 + 2w -------------> Labor…
Q: The following events have occurred at times in the history of the United States 1. The world economy…
A: The aggregate demand is a sum of private investment demand, government expenditure, private…
Q: We would like you to identify a financial market and describe it using an economic approach.…
A: A financial market is an exchange where buyers and sellers trade financial instruments such…
Q: Option A) you receive $10,000 today Option B) you receive $20,000 10 years from today If the…
A: Present value is the value of investment in today's dollar. Future value is the value of investment…
Q: oyment status is given in the following table. d on the criteria used by the Bureau of Labor…
A: Defining Employment and Unemployment The Bureau of Labor Statistics (BLS) sets the criteria for…
Q: Egypt authorities faced significant health and economic policy challenges during the COVID19…
A: (i) A fall in confidence can lead to a decrease in consumption and investment expenditure. Consumers…
Q: The figure below shows the market for a good. An improvement in EQ would shift the supply curve for…
A: An externality is an economic concept that refers to the impact of an economic activity or…
Q: Describe the four fundamental principles of integrative negotiation.
A: Integrative negotiation is a strategy in economics that aims to create a "win-win" outcome for all…
Step by step
Solved in 2 steps
How does it go from qi = (1 - q1 - q2 - ... - qn - c)/2 to q = (1 - cq)/(n + 1) via the substitution in the last step?
- Consider an oligopoly with three firms that produce a homogeneous product. The market demand for the industry is Q = 120 - P. Market supply is determined by the output decisions of the firms. That is, Q = q1 + q2 + q3, where qi is the output of firm i. Each firm can produce at zero cost, and the firms behave non-cooperatively in deciding their output levels.A) Find the Cournot equilibria in this industry.B) What are the profits of each firm?C) Would (any) two firms have an incentive to merge, effectively converting the industry into a duopoly? (Justify your answer.)Q1) Which one of the following statements about Cournot oligopoly model with N firms is incorrect? 1)The result with unspecifed N firms can be applied to N=1. 2)If N>1 and there exists a unique Nash equilibrium, then the market price cannot depend on N. 3)If the model is symmetric and there exists a unique Nash equilibrium and N approaches infinity, then the market price approaches to the marginal cost, i.e., the perfectly competitive price. 4)The result with unspecified N firms can be applied to N approaching infinity. Q2) Which of the following statements about the classic Cournot duopoly model is incorrect? 1)The products of the two firms are homogeneous. 2)It is a static game with complete information. 3)The two firms decide on their prices and let their quantities be dictated demand conditions. 4)There exist examples that have unique Nash equilibrium points.Consider Firm A and Firm B, each with cost functions C(qA) = 5qA, and C(qB) = 5qB, The inverse market demand is given by p = 30 − Q, where Q = qA + qB represents the total quantity demanded in the market. a) Suppose the firms compete in a Cournot oligopoly model. What are the quantities supplied by each firm and their profits? b) Now let Firm A be the first-mover. If the firms compete in a Stackelberg oligopoly model, what are the quantities supplied by each firm and their profits? c) How can you interpret the difference in profits between parts (a) and (b)? In other words, if you were Firm A, which scenario would you prefer, and what might this say in general?
- Consider a Cournot oligopoly consisting of five identical firms producing good X. If the firms produce good X at a marginal cost of $7 per unit and the market elasticity of demand is −3, determine the profit-maximizing price. Multiple Choice $7 per unit $5.25 per unit $7.50 per unit $4.20 per unitConsider duopoly model with firm 1 and firm 2. Firms have constant marginal costs, c_1 = c_2 = 10. Demand functions are given by equations: Q_1= (7*100) - 2*P_1 + P_2 Q_2 = (7*100) + P_1 - 2*P_ 2 Note that * signifies the multiplication sign. Firms play a simultaneous moves game where each store chooses its own price. Find each firms’ best response functions. Draw the best response functions of each firm. Label the graph properly. Is this a game of strategic substitutes or strategic complements? Why? Find the pure-strategy Nash equilibrium of the game. Find the profits each firm receives.Two firms operate in a Cournot Duopoly with an inverse market demand function: P = 180 – 3Q, where Q = q1 + q2. Firm 1 has a total cost structure; TC1 = 50 + 2q1 + 2q1 2 and firm 2 had a total cost structure: TC2 = 100 + 3q2 + 3q2 2 . Answer the following questions: a. If both firms wish to compete, what is the optimal quantity for each firm (qi) and the market price? b. What are the profits for each firm from the strategy in part a? c. If both firms choose to collude and not directly compete, what is the new price, quantity, and profits for each firm?
- A homogenous-good duopoly faces an inverse market demand function of p = 150 − Q. Assume that both firms face the same constant marginal cost, MC1 = MC2 = 30. Calculate the output of each firm, the market output, and the market price in a Nash-Cournot equilibrium Re-solve part (a) assuming that the marginal cost of firm 1 falls to MC1 =20 Explain what will happen to each firm’s output, the market output, and the market price if the two firms can collude (e.g., form a cartel)Consider a Cournot duopoly with the inverse demand P = 200 − 2Q. Firm 1 and 2 compete by simultaneously choosing their quantities. Both firms have constant marginal and average cost MC = AC = 20. A) Find each firm’s best response function. Plot the best response functions (label the x-axes as ?1 and y-axes as ?2 ). B) Find the Cournot-Nash equilibrium quantities, profits and market price. Illustrate the equilibrium point on your graph in part (A). C) Suppose instead that firm 1 had MC = AC = 20, but firm 2’s MC = 8. What is the Cournot-Nash equilibrium outputs and profits now? How would this affect your answers to part (B)? ExplainThe market demand curve faced by Stackelerg duopolies is: Qd = 12,000 - 5P where Qd is the market quantity demanded and P is the commodity's price in dollars. Firm A's marginal cost is: MCa = 0.08qa where MCa is Firm A's marginal cost in dollars and qa is the quantity of output produced by Firm A. Firm B's marginal cost equation is: MCb = 0.1qb where MCb is Firm B's marginal cost in dollars and qb is the quantity of output produced by Firm B. Because of Firm A's lower marginal cost, Firm B has conceded the power to move first to Firm A. a. Given Firm B will move second, what is the equation for Firm B's reaction function with qb expressed as a function of qa? b. Given Firm A can move first, what quantity of output will Firm A produce? c. What quantity of output will firm B produce? What price will be established for the commodity?