Two firms compete under Cournot competition with constant marginal costs c_1 = 9 and c_2 = 3. The market demand is P=24-Q. a) Compute the market share of each firm, the market price, and the total quantity produced in the market. b) Compute the HHI index. c) Compute the Lerner index.
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Two firms compete under Cournot competition with constant marginal costs c_1 = 9 and c_2 = 3. The market demand is P=24-Q. a) Compute the market share of each firm, the market price, and the total quantity produced in the market. b) Compute the HHI index. c) Compute the Lerner index.
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- A market is served by two firms in Cournot competition, each with a constant marginal cost of $100. The market inverse demand curve is P = 2,000 – 50 Q, where Q is the total market output produced by the two firms, q 1 + q 2. What is Firm 1's reaction function? A. q1 = 400 – 100q2 B. q1 = 19 – 0.5q2 C. q1 = 400 – 0.2P D. q1 = 210 – q2There are three identical firms in the market research industry. The demand is 1 – Q, where Q = q1 + q2 + q3. The marginal cost is zero. a. Compute the Cournot equilibriumEvaluate the following: “Since a rival’s profit-maximizing price and output depend on its marginal cost and not its fixed costs, a firm cannot profitably lessen competition by implementing a strategy that raises its rival’s fixed costs.”
- Suppose three firms compete in a homogeneous-product Cournot industry. The market elasticity of demand for the product is −2, and each firm’s marginal cost of production is $50. What is the profit-maximizing equilibrium price?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.Each of the statements below describes a characteristic of the following market structures: perfect competition, monopolistic competition, oligopoly, and monopoly. Identify which market structure displays each of the characteristics. (There may be more than one.) a) Each firm produces at Minimum efficient scale (MES) in long-run equilibrium. b) Firms earn profit in long-run equilibrium. c) Each firm produces output where MC=MR. d) Each firm produces output where P=MC. e) There is free entry to the industry
- Is collusion by a group of sellers or buyers possible in a market of pure and perfect competition? Explain your answer.For each of the following characteristics, say whether it describes a monopolistic competitive or oligopoly market, both or neither. There is a single model to explain the firm's behavior. Firms in this market produce the socially efficient level of output. Firms make zero economic profit in the long run. Market is dementated by a few firms. Strategic behavior is very important.QUESTION 3 Consider the following three versions of price competition: Cournot competition, Bertrand competition, and joint profit maximisation through collusion, and let the model and equilibrium be symmetric. Rank the toughness of price competition from the highest to the lowest, which of the following is the correct ranking? A. Cournot, Bertrand, collusion. B. Collusion, Bertrand, Cournot. C. Cournot, collusion, Bertrand. D. Bertrand, Cournot, collusion.
- If a market changes from oligopoly to perfect competition, than as a result: Group of answer choices Output should increase in the long run. Fewer resources will be allocated to the market. Prices should rise in the long run. Profitability should rise in the long run. Note :- solve with details explanation and no plagiarism.Explain in few lines Three firms are competing through prices (Bertrand competition). They are all selling the same products. The only difference is that the first two firms have a constant marginal cost equal to 2 while the third firm has a constant marginal cost equal to 5. In equilibrium the two firms with lower marginal cost will set their price just slightly below 5Economics: Industrial Economics Question: In a market operating under quantity competition there are 2 firms (Cournot duopoly). The cost structure of firm 1 is given by C1(q1) = 675 + 60q1 + (q1)^2 and that of firm 2 is given by C2(q2) = 375 + 20 q2 + 5 (q2)^2. The inverse demand function is P = 300 - 2 Q1, where Q = q1 + q2. Define the profit maximization problem that every firm faces and solve for the respective best response functions. Use these (or the first order condition directly) to answer the following: 1. The Nash Equilibrium quantity produced by firm 1 q1* is Choices: A. 33.3 B. 38.3 C. 40 D. 35 2. The Nash Equilibrium quantity produced by firm 2 q2* is Choices: A. 15 B. 53.3 C. 20 D. 21.7 3. The Nash Equilibrium price is Choices: A. 126.7 B. 180 C. 200 D. 190 4. The Lerner Index for the market is closest to Choices: A. 0.29 B. 0.66 C. 0.43 D. 0.57 Thank you for your help and support Instructor Agent!
