Imperfect Competition - End of Chapter Problem Consider the Cournot-Stackelberg competing islands of Penang and Grenada discussed in the previous problem. (The inverse demand function remains P = 100 - qp - 9G.) a. Suppose Grenada's cost of production falls to $16, while Penang's remains at $20. Grenada's function will now be qG = 42 – 0.5qp - , and Penang's will be qp = 40-0.59G - Specify the two islands' equilibrium output levels. 9G= 29.33 9G= Incorrect qp = 38 b. Suppose Grenada's cost of production remains at $20, while Penang's falls to $16. Grenada's reaction function will now 40-0.5qp, and Penang's will be qp = 42-0.5qG. Specify the two islands' equilibrium output levels. be qG = 25.33 qp = Incorrect 23
Imperfect Competition - End of Chapter Problem Consider the Cournot-Stackelberg competing islands of Penang and Grenada discussed in the previous problem. (The inverse demand function remains P = 100 - qp - 9G.) a. Suppose Grenada's cost of production falls to $16, while Penang's remains at $20. Grenada's function will now be qG = 42 – 0.5qp - , and Penang's will be qp = 40-0.59G - Specify the two islands' equilibrium output levels. 9G= 29.33 9G= Incorrect qp = 38 b. Suppose Grenada's cost of production remains at $20, while Penang's falls to $16. Grenada's reaction function will now 40-0.5qp, and Penang's will be qp = 42-0.5qG. Specify the two islands' equilibrium output levels. be qG = 25.33 qp = Incorrect 23
Chapter8: Monopoly
Section: Chapter Questions
Problem 12SQP
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