Suppose there are two firms competing in a market. Both firms have the cost function c(x) =10x/2 while the demand function is given by x(p) = 100 – 0.1p. c. Suppose firm 1 decides its quantity first and firm 2 follows after observing x1. Find the profit maximizing quantity and price for this Stackelberg competition
Q: One difference between a competitive firm and a monopoly is that __________________. a. monopoly…
A: Meaning of Market: The term market refers to the situation under which the producers or the…
Q: (a) Suppose there is a single firm with inverse supply function p(q) = q. Find the competitive…
A: *Answer:
Q: Given P = 300 + 200Qs (demand equation), P = 6300 − 50Qd (supply equation), and TC = 500 + 10Q +…
A: For a competitive firm, prices are given and it has to produce where P=MC Where P is determined by…
Q: Good Zis produced and sold in a competitive industry, and long-run industry supply is characterized…
A: Perfect competition is a type of market structure.
Q: In the town of Fargo there are two bakers, Alma and Blanca. Alma's bread tastes just like Blanca's –…
A:
Q: Consider a market with demand P(Q) = 112 3Q in which 9 identical firms compete. All firms face T…
A: (Note: Since there are multiple parts only the first three have been solved). (a) The residual dd…
Q: Firm A: TC = 10 + 60Q - 10Q^2 + 0.6Q^3 Firm B: TC = 2 + 50Q - 7Q^2 + Q^3 the graph below presents…
A: TCA = 10 + 60Q - 10Q2 + 0.6Q3 TCB = 2 + 50Q - 7Q2 + Q3
Q: 7. Two firms produce identical goods, with a production cost of c> 0 per unit. Each firm sets a…
A: The theory that explains the way choices are made when there are more than one choices is called…
Q: Consider two firms facing the demand curve P = 50 - Q where Q = q1 + q2. The firms' cost functions…
A: In Cournot equilibrium, two firms compete in quantity and maximize their profit by producing at…
Q: Consider two identical firms that face the market demand p = 180 − q, where q = q_1 + q_2 is the…
A: Demand is an economic guideline alluding to a shopper's longing to buy goods and services and…
Q: 3. Suppose there are two firms competing in a market. Both firms have the cost function c(x) =10x/2…
A: There are four types of market structure; perfect competition, monopoly, monopolistic competition…
Q: Consider two firms competing in a Cournot fashion. Each firm has MC=10 and the market demand is…
A: Cournot model shows how two companies in a duopoly can successfully compete without price fixing or…
Q: Consider an electricity market where there are three suppliers, each with constant marginal cost (a…
A: (Note: Since there are multiple parts, only the first three have been solved). (a) A perfectly…
Q: 1. there are two companies (company 1 and company 2) that operate in a market where both firms…
A: Now as the two companies collaborate and act as a single monopoly firm, the two companies would…
Q: Suppose the demand function for widgets is Q(p) = 60 – p, and all firms that produce widgets have…
A: We are given the demand function for widgets as Q(p) = 60 – pAnd, the cost function is given as C(q)…
Q: A homogenous product is produced by two rival firms. They have the same costs. The market demand is:…
A: a. P= 80-Q1-Q2 C1= 50Q1 C2=50Q2 MC1= MC2=50 TR1= PQ1 = (80 -Q1 - Q2)Q1 = 80Q1 - Q12 -…
Q: Here is a market with three firms: 1, 2, and 3. The demand curve is P=100-Q. There is no fixed cost…
A: The demand curve is a graphical representation of the relationship between a good's or service's…
Q: uppose that each firm in a competitive industry has the following identical costs: Total cost: TC =…
A: 1) Let's start by calculating the fixed, variable and marginal costs. The total cost function of…
Q: Consider the market demand curve given by q = 100 – 10p. Assume there are two firms in the industry…
A: When each firm engages in a price war, each firm would keep on undercutting the other firm in terms…
Q: Consider two Cournot firms, Firm A and Firm B. Firm A has a marginal cost of 10 and Firm B has a…
A:
Q: Use this information for this and the next question: The market inverse demand curve is given by…
A: Given information Market demand =P(Q) = 100 - 0.02Q TC of dominant firm=40q TC of small firms=60q +…
Q: 1. there are two companies (company 1 and company 2) that operate in a market where both firms…
A: Given that: Q = 11 - 0.25PQ = q1 + q2TC = 4qa In Bertrand Competition with homogeneous items, the…
Q: The table below shows the average cost (AC) for a purely competitive market. The average revenue…
A: Since you have posted a question with multiple sub parts, we will solve first three sub parts for…
Q: There are three identical firms in the market research industry. The demand is 1 – Q, where Q = q1 +…
A: The firms attempt to maximize their profits by choosing the output to be produced. Profits are equal…
Q: total cost function of one of the firms is expressed by C(Q) = 100 + 4Q2, and demand is P = 80 – 4Q…
A: A monopoly is a sole producer of a good in the market thus acting as a price maker whereas in a…
Q: PROBLEM (5) (In a market with demand Q = 780 - p, there are 3 identical firms, A, B and C; each with…
A: Given demand function Q=780-P TC=3Q^2
Q: A firm’s production function is Q = 10 + 30L - .5L2 + 30K – K2, and its competitive demand function…
A: Answer A firm’s production function is Q = 10 + 30L - 0.5L2 + 30K – K2 MPL = = 40 - L At…
Q: Suppose a firm has two plants. The costs are: TC = 30 + TC1 + TC2.. TC1 = 10Q1 + Q12 . TC2 = 10Q2 +…
A: * SOLUTION :- * Given that, Pm = 80 - 0.5Qm TRm = Pm x Qm = 80Qm - 0.5Qm2 MRm = dTRm/dQm…
Q: uppose that the market consists of 6 identical firms , that the market demand curve is P=200-2Q and…
A: Cournot oligopoly is a kind of imperfect competition in which it is assumed that the firms compete…
Q: What is the quantity that Firm 1 produces? Round your answer to 2 decimal points.
A: Given, p=20-3q Where q=q1+q2+q3 Cost function= ci(qi)= 5qi2 p= 20-3(q1+q2+q3) p= 20-3q1-3q2-3q3 Now…
Q: Question 4 Many companies reward their managers based on profits so that the managers will make…
A: Given information 2 firms in the market represents duopoly in the market. Firs can maximize profit…
Q: Consider two identical Cournot firms that have zero marginal cost facing the market inverse demand…
A:
Q: In Figure, what is the profit-maximizing level of output for firm 2 when firm 1 produces zero units…
A: A market is a place where the buyers and the sellers interact with each other and the exchange of…
Q: Suppose that the manager of a firm operating in a competitive market has estimated the firm's…
A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…
Q: Q.2 Two firms produce homogeneous products. The inverse demand function is: p(x₁, x₂) = a x₁- x2,…
A: Cournot is quantity competition, and Bertrand is price competition. Both are simultaneous move…
Q: Consider a market with the demand curve Q(P) = 3700– 100P. Two companies compete in Bertrand…
A: Here it is oligopoly market where both the firms are sole competitors of each other selling same…
Q: 2. Consider a market for a homogenous good with the following inverse demand function: P = 52 – 2Q…
A: we have P=52-2Q and Total cost C(Q)=4Q so π(profit) = TR-TC=PxQ-TC=(52-2Q)Q-4Q=52Q-2Q2-4Q Thus…
Q: Q.1 Two firms produce homogeneous products. The inverse demand function is given by: p(x₁, x₂) =…
A:
Q: Consider an industry that consists of 3 tirms facing a demand curve P = 80 - Q. All three firms have…
A: If firms 2 and 3 merge then the production will take place only in firm 2 because of lower marginal…
Q: In a Cournot market with two firms, the inverse market demand curve is P=50-2Q, where Q=q1+q2(Firm…
A: In the Cournot Model, firms compete on the basis of output. Both firms tend to act simultaneously.
Q: suppose that in this market, our firm a competes with one other identical firm, ß, and that both…
A: "Since you have asked multiple question. We will solve only first question for you." P =13 - Q Q =…
Q: The market demand function for birthday cards in Greenwich Village is: P = 100 − 10Q. The total cost…
A: Price discrimination means charging the different price from the consumers for same quantity of…
Q: Cournot competition with asymmetric costs: Consider two firms competing in quantities, with total…
A: C1(q1) = αq1 and C2(q2) = q2, with α ∈ [1, 2] Market demand is p = 2 − Q where Q = q1 + q2 Profit of…
Q: Assume that there are two firms in a market with inverse demand function P(Q) = 120-Q. Both firms…
A: Consumer surplus means a situation in which the willing to pay price by the consumer is higher than…
Q: 4. In the above figure, if the firm increases its output from Q1 to Q2, it will . A) increase its…
A: Note:- Since we can only answer one answer at a time and first question looks incomplete so, we'll…
Q: Monopoly outcome versus perfectly competitive outcome Consider the daily market for hot dogs in a…
A: A perfect market, sometimes known as an atomistic market, is characterized by numerous idealizing…
3. Suppose there are two firms competing in a market. Both firms have the cost function c(x) =10x/2 while the
c. Suppose firm 1 decides its quantity first and firm 2 follows after observing x1. Find the profit maximizing quantity and price for this Stackelberg competition
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
- 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. Calculate the market price under each of the 2 scenarios below, (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 only two firms. The firms operate in a Stackelberg type market where Firm 1 is the follower & Firm 2 is the leader. The market inverse demand function is: P = 120 – 2Q, where Q = q1 + q2. Each firm has a similar cost structure with a marginal cost; MC = 12, though each have different fixed costs; FC1 = 50 & FC2 = 80. Answer the following questions: a. If both firms wish to compete, what is the optimal quantity for each firm (qi) and the market price? b. What are the profits for each firm from the strategy in part a? c. If both firms choose to collude and not directly compete, what is the new price, quantity, and profits for each firm?2.- Each of two firms, firms 1 and 2, has a cost function C(q) = 1 2 q; the demand function for the firms' output is Q = 1.5-p, where Q is the total output. Firms compete in prices. That is, firms choose simultaneously what price they charge. Consumers will buy from the firm offering the lowest price. In case of tying, firms split equally the demand at the (common) price. The firm that charges the higher price sells nothing. (Bertrand model.) (a) Formally argue that there could be no equilibrium in prices other than p1 = p2 = 1 2. (b) Solve the same problem, but this time assuming that firms compete in quantities.Now, suppose that firm 1 has a capacity constraint of 1/3. That is, no matter what demand it gets, it can serve at most 1/3 units. Suppose that these units are served to the consumers who are willing to pay the most. Thus, even if it sets a price above that of firm 1, firm 2 may be able to sell some output. (c) Obtain the (residual) demand of firm 2 (as a function of its own…
- 2.- Each of two firms, firms 1 and 2, has a cost function C(q) = 0.5q; the demand function for the firms' output is Q = 1.5 - p, where Q is the total output. Firms compete in prices. That is, firms choose simultaneously what price they charge. Consumers will buy from the firm offering the lowest price. In case of tying, firms split equally the demand at the (common) price. The firm that charges the higher price sells nothing. (Bertrand model.) (a) Formally argue that there could be no equilibrium in prices other than p1 = p2 = 0.5 (b) Solve the same problem, but this time assuming that firms compete in quantities.Now, suppose that firm 1 has a capacity constraint of 1/3. That is, no matter what demand it gets, it can serve at most 1/3 units. Suppose that these units are served to the consumers who are willing to pay the most. Thus, even if it sets a price above that of firm 1, firm 2 may be able to sell some output. (c) Obtain the (residual) demand of firm 2 (as a function of its own…3. Consider the market demand curve given by q = 100 – 10p. Assume there are two firms in the industry producing a homogeneous good with a representative cost function c(q) = 4q. If each firm engages in a price war where the price can take only integer value, calculate the market equilibrium price.Consider two identical firms (firm 1 and firm 2) that face a linear market demand curve. Each firmhas a marginal cost of zero and the two firms together face demand: P = 50 - 0.5Q, where Q = Q1 +Q2. Find the Cournot equilibrium quantity and market price for each firm.
- Suppose the demand for pizza in a small isolated town is p = 10 - Q. There are only two firms, A and B, and each has a cost function TC = 2 + q. Determine the Cournot equilibrium Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.Consider an industry with only two firms: firm A and firm B. The industry’s inverse demand is P(Q) = 400 − 1/10Q where P is the market price and Q is the total industry output. Each firm has a marginal cost of $10. There are no fixed costs and no barriers to exit the market. Suppose the two firms engage in Stackelberg competition, with firm A moving first, and firm B moving second. Find the equilibrium price in the industry, the equilibrium outputs, as well as the profits for each firmQ4. Consider two firms competing in a Cournot fashion. Each firm has MC=10 and the market demand is given by P=100-Q, where Q is the total market output. What is firm 1's Response function? a. q1=45-.5q2 b. q1=30 c. q2=45-.5q1 d. firm 1 will set p=MC
- Answer the given question with a proper explanation and step-by-step solution. Suppose inverse demand is given by the following: P = 40 - 0.5Q There are two firms each with the same marginal cost. Marginal Cost is 10. Under Cournot competition, what is the output for firm one? 10 20 25 30Consider two identical firms (firm 1 and firm 2) that face a linear market demand curve. Each firm has a marginal cost of zero and the two firms together face demand: P = 150 - 0.25Q, where Q = Q1 + Q2. Find the Cournot equilibrium quantity and market price for each firm.Two firms produce goods that are imperfect substitutes. If firm 1 charges price p1 and firm 2 charges price p2, then their respective demands are q1 = 12 - 2p1 + p2 and q2 = 12 + p1 - 2p2 So this is like Bertrand competition, except that when p1 > p2, firm 1 still gets a positive demand for its product. Regulation does not allow either firm to charge a price higher than 20. Both firms have a constant marginal cost c = 4. (a) Construct the best reply function BR1(p2) for firm 1. That is, p1 = BR1(p2) is the optimal price for firm 1 if it is known that firm 2 charges a price p2. Construct a Nash equilibrium in pure strategies for this game. Are there any Nash equilibria in mixed strategies? If yes, construct one; if no provide a justification. (b) Notice that for any given price p1, firm 1’s demand increases with p2, so firm 1 is better off when firm 2 charges a high price p2. What is the best reply to p2 = 20? What is the best reply to p2 = 0 (c) What prices for firm 1 are…
