Suppose that the Bob Buttons Company (BBC) enters the market. BBC has the same cost function of c=3q+1. Let denote q1 the quantity sold by ABC and denote the q2 quantity sold by BBC. Now suppose that ABC and BBC reach a Cournot equilibrium. Q: What would be the net change in ABC’s profit as a result of BBC’s entry into the market?____ (type in a negative number if ABC’s profit decreases) (please see the attachement for partial of my work, not sure if it's correct, thank you!)
Suppose that the Bob Buttons Company (BBC) enters the market. BBC has the same cost function of c=3q+1. Let denote q1 the quantity sold by ABC and denote the q2 quantity sold by BBC. Now suppose that ABC and BBC reach a Cournot equilibrium. Q: What would be the net change in ABC’s profit as a result of BBC’s entry into the market?____ (type in a negative number if ABC’s profit decreases) (please see the attachement for partial of my work, not sure if it's correct, thank you!)
Micro Economics For Today
10th Edition
ISBN:9781337613064
Author:Tucker, Irvin B.
Publisher:Tucker, Irvin B.
Chapter9: Monopoly
Section: Chapter Questions
Problem 1SQ
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Suppose that the Bob Buttons Company (BBC) enters the market. BBC has the same cost function of c=3q+1. Let denote q1 the quantity sold by ABC and denote the q2 quantity sold by BBC.
Now suppose that ABC and BBC reach a Cournot equilibrium.
Q: What would be the net change in ABC’s profit as a result of BBC’s entry into the market?____ (type in a negative number if ABC’s profit decreases)
(please see the attachement for partial of my work, not sure if it's correct, thank you!)
Transcribed Image Text:The Alice Buttons Company (ABC) operates as a monopoly in a market with
inverse demand p = 120 — q. Its cost function is c = 3q +1
Transcribed Image Text:SI
18=64-021 )
182-11 =2% <= 26-Lil =ibe
187-5.85 -7%
дів чале в чу хом авев сость - гвг-II zoot
I-bib =b -roli
Підбоеві 0=16 wayn
63-5.85=%
ев палів 11 хот 07
точ
(1+6²x4) - bε*18=12
0718є
—
ве та
3
5.85 = 25.1
br-Lil =187 -5.85
167-5-85-16
чЉ3-fi85 =%
наве -гыз -ть -rbarl
неве ты тв- в-ого) =
(нова) - твоd sen
0=26-162-LII
Irbib -18-18 li
1+64=0 ака
ньель в-в-точ
1-134-¹b (²3-¹2-021) =
oot
=
гв-13-021 =
6-021 =d
(над-'b.d=12
²6+b=1
S
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