Please answer questions in attachments. ALL QUESTIONS. thank you. Question 1 (Chapter 12)Suppose that the market demand for facial mud packs are given as follows:P = 2,200 – Q.Mud packs can be produced at no cost. Determine the level of output that would beproduced by each firm in a Cournot duopoly in the long run. Calculate the pricecharged for mud packs. Show all calculations.Question 2 (Chapter 13)Buy-right is a chain of grocery stores operating in small cities throughout thesouthwestern United States. Buy-right's major competition comes from another chain,Acme Food Stores. Both firms are currently contemplating their advertising strategyfor the region. The possible outcomes are illustrated by the payoff matrix below. Acme FoodsDon't IncreaseAdvertisingIncreaseAdvertisingBuy-rightIncreaseAdvertisingDon't IncreaseAdvertising20, 1535, -52, 3025, 25Entries in the payoff matrix are profits. Buy-right's profit is before the comma, Acme'sis after the comma.Describe what is meant by a dominant strategy.Given the payoff matrix above, does each firm have a dominant strategy? ·Under what circumstances would there be no dominant strategy for one or both2.12.22.3firms?Question 3 (Chapter 13)Two firms at the St. Louis airport have franchises to carry passengers to and fromhotels in downtown St. Louis. These two firms, Metro Limo and United Limo, operatenine passenger vans. These duopolists cannot compete with price, but they cancompete through advertising.Their payoff matrix is below:United LimoDon't IncreaseAdvertisingIncreaseAdvertisingMetro LimoIncreaseAdvertisingDon't IncreaseAdvertising25, 1530,015, 2040, 53.1Does each firm have a dominant strategy? If so, explain what that strategy is.3.2What is the Nash equilibrium? Explain where the Nash equilibrium occurs in thepayoff matrix.

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Suppose that the market demand for facial mud packs are given as follows: P = 2,200 – Q. Mud packs can be produced at no cost. Determine the level of output that would be produced by each firm in a Cournot duopoly in the long run. Calculate the price charged for mud packs. Show all calculations.

Suppose that the market demand for facial mud packs are given as follows: P = 2,200 – Q. Mud packs can be produced at no cost. Determine the level of output that would be produced by each firm in a Cournot duopoly in the long run. Calculate the price charged for mud packs. Show all calculations.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter15: Imperfect Competition

Section: Chapter Questions

Problem 15.2P

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