Microeconomics (9th Edition) (Pearson Series in Economics)
9th Edition
ISBN: 9780134184890
Author: PINDYCK
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 12, Problem 8E
(a)
To determine
The cournot-Nash equilibrium of the market.
(b)
To determine
The
(c)
To determine
The willingness to invest by firm 2 in order to decrease the marginal cost to $25.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Consider a Cournot duopoly with a demand function of p=10-Q(where Q=q1+q2) and a constant marginal cost of c>0.
a) Find the two firms’ best-response functions.
b) Find the Nash equilibrium output.
c) What happens to the equilibrium market price as c increases (assuming that c remains below 10)?
d) What happens to the equilibrium market price if c increases above 10?
How would the Cournot equilibrium change in the airline example if American's marginal cost were $90
and United's were $180?
The demand the duopoly quantity-setting firms face is Q=339−p
with an inverse demand function of p=339−1qA −1qU
where qA is the quantity produced by American and qU is the quantity produced by United.
The Cournot-Nash equilibrium occurs where qA equals ? enter your response here
and qU equals? enter your response here. (enter numeric responses using integers)
Furthermore, the equilibrium occurs at a price of ? (round your answer to the nearest penny)
Chapter 12 Solutions
Microeconomics (9th Edition) (Pearson Series in Economics)
Knowledge Booster
Recommended textbooks for you
- Survey of Economics (MindTap Course List)EconomicsISBN:9781305260948Author:Irvin B. TuckerPublisher:Cengage LearningManagerial Economics: Applications, Strategies an...EconomicsISBN:9781305506381Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. HarrisPublisher:Cengage Learning
- Managerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage Learning
Survey of Economics (MindTap Course List)
Economics
ISBN:9781305260948
Author:Irvin B. Tucker
Publisher:Cengage Learning
Managerial Economics: Applications, Strategies an...
Economics
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning