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Hello! I just want to ask for help whether the answers in the given pictures are correct. If it's not, please help me recheck and resolve it. Please refer to the given pictures below for the answers.   After verifying the given answers shown in the subsequent picture, PLEASE ANSWER NUMBER 2: Compare the results of your calculations in item no.1 using a graphical illustration.    SITUATION/PROBLEM: Consider two identical firms with similar cost functions given by C1 = cq1 and C2 = cq2 . The inverse demand function for the good Q is given by P = a - Q, where Q = q1 + q2 . 1. Solve for the equilibrium price, equilibrium quantity and the profit of each firm under a:  a.) quasi-competitive model b.) cartel model c.) cournot solution model   2. Compare the results of your calculations in item no.1 using a graphical illustration.    NOTE: Type only your answers. Please do not handwritten your answers.

Hello! I just want to ask for help whether the answers in the given pictures are correct. If it's not, please help me recheck and resolve it. Please refer to the given pictures below for the answers.   After verifying the given answers shown in the subsequent picture, PLEASE ANSWER NUMBER 2: Compare the results of your calculations in item no.1 using a graphical illustration.    SITUATION/PROBLEM: Consider two identical firms with similar cost functions given by C1 = cq1 and C2 = cq2 . The inverse demand function for the good Q is given by P = a - Q, where Q = q1 + q2 . 1. Solve for the equilibrium price, equilibrium quantity and the profit of each firm under a:  a.) quasi-competitive model b.) cartel model c.) cournot solution model   2. Compare the results of your calculations in item no.1 using a graphical illustration.    NOTE: Type only your answers. Please do not handwritten your answers.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
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
Chapter8: Cost Analysis
Section: Chapter Questions
Problem 2.1CE
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Hello! I just want to ask for help whether the answers in the given pictures are correct. If it's not, please help me recheck and resolve it. Please refer to the given pictures below for the answers.

 

After verifying the given answers shown in the subsequent picture, PLEASE ANSWER NUMBER 2: Compare the results of your calculations in item no.1 using a graphical illustration. 

 

SITUATION/PROBLEM:

Consider two identical firms with similar cost functions given by C1 = cq1 and C2 = cq2 . The inverse demand function for the good Q is given by P = a - Q, where Q = q1 + q2 .

1. Solve for the equilibrium price, equilibrium quantity and the profit of each firm under a: 

a.) quasi-competitive model

b.) cartel model

c.) cournot solution model

 

2. Compare the results of your calculations in item no.1 using a graphical illustration. 

 

NOTE: Type only your answers. Please do not handwritten your answers.

Step 4 c. Profit of Firm 1: #1=pqi – c1 Profit of Firm 2: a2=pq2 – C2 Now, 71 is maximized with respect to q1: dn FOC : 2q1 – 92 – c = 0 dq 91= - 92 Now, 72 is maximized with respect to q2: FOC : dn =a – dq2 2q2 – q1 – c = 0 92=" - 1 а-с Now, solving the above equations: qı= -( -1) а-с 91= 2 a-c 4 a-c 91*= units Plugging in the value: а-с 92 *=units Now, price will be: P-а — * +q2*) За-2а+2с 3 a+2c 3 The profits will be: A 1*=(P * –C)q1* _ (a-c) 9 (а-с)? 9.
Transcribed Image Text:Step 4 c. Profit of Firm 1: #1=pqi – c1 Profit of Firm 2: a2=pq2 – C2 Now, 71 is maximized with respect to q1: dn FOC : 2q1 – 92 – c = 0 dq 91= - 92 Now, 72 is maximized with respect to q2: FOC : dn =a – dq2 2q2 – q1 – c = 0 92=" - 1 а-с Now, solving the above equations: qı= -( -1) а-с 91= 2 a-c 4 a-c 91*= units Plugging in the value: а-с 92 *=units Now, price will be: P-а — * +q2*) За-2а+2с 3 a+2c 3 The profits will be: A 1*=(P * –C)q1* _ (a-c) 9 (а-с)? 9.
Step 2 a. The point of equilibrium occurs at: P = MC Therefore, – Q=c а — Q*=a - C Now, P=a – Q Р*-а — (а — с) Profit is calculated as the difference between total revenue and total cost: *=P * Q * –C* —с (а — с) — с(а — с) =0 Illustration: APuice MC = P MR Juanting Step 3 b. The profit here is: л3(а — Q(q1 + q2) — с1 — с2 =a(qı + 92) – (91² + qı² + 2q192) – c(qı + 92) Now, profit is maximized with respect to q1 and 92: FOC : -(a – c) – 2q1 – 292 = 0 dqi dn %3(а — с) — 291 —242 3 = 0 dq2 Q*=units Also, (q1 * -42*)=units а-с а-с P*=a – Q* a+c T*=(P * –C)Q* (а-с)? 4
Transcribed Image Text:Step 2 a. The point of equilibrium occurs at: P = MC Therefore, – Q=c а — Q*=a - C Now, P=a – Q Р*-а — (а — с) Profit is calculated as the difference between total revenue and total cost: *=P * Q * –C* —с (а — с) — с(а — с) =0 Illustration: APuice MC = P MR Juanting Step 3 b. The profit here is: л3(а — Q(q1 + q2) — с1 — с2 =a(qı + 92) – (91² + qı² + 2q192) – c(qı + 92) Now, profit is maximized with respect to q1 and 92: FOC : -(a – c) – 2q1 – 292 = 0 dqi dn %3(а — с) — 291 —242 3 = 0 dq2 Q*=units Also, (q1 * -42*)=units а-с а-с P*=a – Q* a+c T*=(P * –C)Q* (а-с)? 4
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