QUESTION 16 Firms A and B engage in Stackelberg competition, where p = 90 – 40. MC. = S10. MC. = $26: Firm A is the Stackelberg leader. What is the market price? O $18 $42 O $34 O $50
Q: Suppose two firms face market demand of P=150-Q, where . Both firms have the same unit cost of C,…
A: We are going to study stackelberg model to answer this question.
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A: Market Demand is P=30-Q where Q=q1+q2 Total Cost functions of the two firms are: TC1=10q1 TC2=20q2
Q: Suppose two firms face market demand of P=150-Q, where Q=q1+q2. Both firms have the same unit cost…
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A: Cournot's model shows the equilibrium when firms are competing in terms of quantity.
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A: Given that MCa = MCb = 0
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A: The following problem has been solved as follows:
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A: A Bertrand model is a model in economics in which the firms use their marginal costs to set prices…
Q: QUESTION 10 Suppose there are two firms that produce an identical product. The demand curve for the…
A: We have , P = 62 - Q MC = 37 Since the firms are choosing Quantities , they are playing cournot.
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A: Bertrand equilibrium refers to the equilibrium where the price is equal to marginal cost. It means…
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Q: uppose two firms face market demand of P=150-Q, where Q=q1+q2 . Both firms have the same unit cost…
A: In a stackleberg model the leader takes first move which is followed by follower firms.
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A: Given the information: Firm 1: Q1=40-3P1+P2Firm 2: Q2=40-3P2+P1MC = $2.30
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A: In the market, we have two firms with symmetry cost function C(q) = 2+2q
Q: a) Consider 2 firms competing on price choice and facing the following market demand functions: 91 =…
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Q: Suppose two firms face market demand of P=150-Q, where . Both firms have the same unit cost of C, C=…
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A: Given information market demand function of P = 600-0.5Q where Q = q1+q2 cost function Ci = 20qi.
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Q: 248 249 250 251 252 253 254 9,622.35 32.60 1 32,60 9,654.90 32.55 1 32,55 9,687.40 32.50 1 32.50…
A: MRP is the marginal revenue product which is the demand for the input.
Q: Can you help me solve this please?
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- . (Requires calculus). In the model of a dominant firm, assume that the fringe supply curve is given by Q = -1 + 0.2P, where P is market price and Q is output. Demand is given by Q = 11 – P.What will price and output be if there is no dominant firm? Now assume that there is a dominant firm, whose marginal cost is constant at $6. Derive the residual demand curve that it faces and calculate its profit-maximizing output and price. highest bidder, but both the winning and losing bidders must pay her their bids. So if Jones bids $1 they pay a total of $3, but Jones gets the money, leaving him with a net gain of $98 and Smith with -$1. If both bid the same amount, the $100 is split evenly between them. Assume that each of them has only two $1 bills on hand, leaving three possible bids: $0, $1 or $2. Write out the payoff matrix for this game, and then find its Nash equilibrium.Suppose you are the economic adviser ofa company producing three brands of mobile pnones;Nokia 10, Samsung X and iPhone 7. Suppose further that, your company currently sells 120units of iPhone Z at e800 per unit, 150 units of Samsung X at e800 per unit and 200 units ofNokia 10 at e100 per unit, but in a bid to maximize profit, the company's managing directorproposes an increase in price of Samsung X from e800 to e1000 per unit for which quantitydemanded is anticipated to fall from 150 to 100 units; iPhone Z from e800 to e 1200 per unitfor which quantity demanded is anticipated to fall from 120 to 100 units; and Nokia 10 from100 to 200 per unit for which quantity demanded is expected to fall from 200 to 100 unitsUsing the mid-polint formula. compute the price elasticity of demand for each brand.From your answer in i, what is the type and economic interpretatiom of each brand'sii.value of elasticity.Firms J and K produce compact-disc players and compete againstone another. Each firm can develop either an economy player (E)or a deluxe player (D). According to the best available marketresearch, the firms’ resulting profits are given by the accompanyingpayoff table.a. The firms make their decision independently, and each is seeking itsown maximum profit. Is it possible to make a confident predictionconcerning their actions and the outcome? Explain.Firm KE DE 30, 55 50, 60 Firm JD 40, 75 25, 50b. Suppose that firm J has a lead in development and so can move first.What action should J take, and what will be K’s response?c. What will be the outcome if firm K can move first?
- 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?Need answer for part b only Zeus and Iron are the only two cement producers in Gotham. The cement they produce is essentially identical. In this market, each firm chooses the output level to produce and the price is determined by aggregate output (Cournot competition). The inverse demand for cement is given by P = 225 − Q/2 . Q is measured in tons and P is in euros. The marginal cost for Zeus is constant at 50 euros/ton. The respective cost for Iron is constant at 40 euros/ton. A technological innovation in the production process allows both firms to reduce marginal cost by 5 euros/ton. a) How much would each firm be willing to pay for the innovation, if it were the only firm to acquire it? b) Consider a situation where firms’ managers, simultaneously and non-cooperatively decide whether to acquire the innovation or not, which costs 900 euros, and then compete in quantities. What is the equilibrium of this game, based on its payoff matrix?EMERGENCY PLEASE: suppose a market consists 3 firms ( firm A, firm B, firm C) and firm A's sales account for 40% of market sales, while firm B and C each control 30% of the market. in this market, the four-firm concentration ration is therefore __________ and the Herfindahl-Hirshman index is equal to _____________. if the firm B and firm C merge, the new value of the Herfindahl-Hirshman index would change to__________. sothe Departement of Justice_________ likely to block this merger. suggestions for the first: suggestions for the second: suggestions for the third:
- Consider a duopoly market with 2 firms. Aggregate demand in this market is given by Q = 500 – P, where P is the price on the market. Q is total market output, i.e., Q = QA + QB, where QA is the output by Firm A and QB is the output by Firm B. For both firms, marginal cost is given by MCi = 20, i=A,B. Assume the firms compete a la Cournot. What are the equilibrium quantities? What is the total quantity supplied on this market? What is the equilibrium price in this market?Consider a market of 6 firms that compete through production. Demand is given as P = 220 – 2Q. Each firm has a marginal cost of $20. a. What will be the equilibrium firm quantities, market price, and firm profits? b. Suppose two firms merge in this market to become a leader. What will be the new equilibrium firm quantities, market price, and firm profits? Was it profitable for the firms to merge into a leader? Note that n = 5 after the merger. c. Suppose another two firms merge to form a second leader in the market. What will be the new equilibrium firm quantities, market price, and firm profits? Was it profitable for the followers to merge into a co-leader? Note that n = 4 and L = 2 after the merger:Brand X is one of many firms in a competitive industry where each firm has a constant marginal cost of 2 dollars per unit of output. If marginal cost for Brand X rises to 4 dollars per unit and marginal costs of all other firms in the industry stay constant, by how much does the price in the industry increase? a. 2 dollars b. 1 dollar c. 0 dollar d. 2/n, where n is the number of firms in the industry e. None of the above.
- Consider the differentiated goods Bertrand price competition model where firms A and B produce similar goods and sell them at pA and pB. The demand for each firm’s product is given byqA =60−2pA +pB andqB =60–2pB +pA ,and there are NO costs of producing either good (all costs are 0). (a)Calculate the (Bertrand) equilibrium prices and the net profits of each firm (b) Now suppose that -instead of competing to maximize their own individual profits- the firms decide to “collude” and set prices pA and pB to maximize their joint profits (sum of their profits). What would be each firm’s optimal price and net profits? Compare these prices and profits with what you found in (a) (greater/smaller/the same?).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!consider a market with inverse demand P(Q) = 10 − Q and two firms with cost curves C1(q1) = 2q1 and C2(q2) = 2q2 (that is, they have the same marginal costs and no fixed costs). They compete by choosing quantities. Suppose that Firm 1 chooses quantity first and is able to credibly commit to this choice. Then firm 2 choose its quantity after observing firm 1’s quantity. In the SPNE of this game, what is the price faced by consumers?- p = 3- p = 4- p = 5- p = 6- p = 7
