The cournot-Nash equilibrium of the market.

Question

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Answer 1

Question

Chapter 12, Problem 8E

(a)

To determine

The cournot-Nash equilibrium of the market.

(b)

To determine

The equilibrium quantity when the firm 1 has the constant MC and AC of $25 and Firm 2 has $40.

(c)

To determine

The willingness to invest by firm 2 in order to decrease the marginal cost to $25.

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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)

Answer 2

Question

Chapter 12, Problem 8E

(a)

To determine

The cournot-Nash equilibrium of the market.

(b)

To determine

The equilibrium quantity when the firm 1 has the constant MC and AC of $25 and Firm 2 has $40.

(c)

To determine

The willingness to invest by firm 2 in order to decrease the marginal cost to $25.

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Answer 3

Question

Chapter 12, Problem 8E

(a)

To determine

The cournot-Nash equilibrium of the market.

(b)

To determine

The equilibrium quantity when the firm 1 has the constant MC and AC of $25 and Firm 2 has $40.

(c)

To determine

The willingness to invest by firm 2 in order to decrease the marginal cost to $25.

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Answer 4

Question

Chapter 12, Problem 8E

(a)

To determine

The cournot-Nash equilibrium of the market.

(b)

To determine

The equilibrium quantity when the firm 1 has the constant MC and AC of $25 and Firm 2 has $40.

(c)

To determine

The willingness to invest by firm 2 in order to decrease the marginal cost to $25.

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Answer 5

Chapter 12, Problem 8E

(a)

To determine

The cournot-Nash equilibrium of the market.

(b)

To determine

The equilibrium quantity when the firm 1 has the constant MC and AC of $25 and Firm 2 has $40.

(c)

To determine

The willingness to invest by firm 2 in order to decrease the marginal cost to $25.

Answer 6

Chapter 12, Problem 8E

(a)

To determine

The cournot-Nash equilibrium of the market.

Answer 7

Chapter 12, Problem 8E

(a)

To determine

The cournot-Nash equilibrium of the market.

Answer 8

(b)

To determine

The equilibrium quantity when the firm 1 has the constant MC and AC of $25 and Firm 2 has $40.

Answer 9

(b)

To determine

The equilibrium quantity when the firm 1 has the constant MC and AC of $25 and Firm 2 has $40.

Answer 10

(c)

To determine

The willingness to invest by firm 2 in order to decrease the marginal cost to $25.

Answer 11

(c)

To determine

The willingness to invest by firm 2 in order to decrease the marginal cost to $25.

Answer 12

Expert Solution & Answer

Answer 13

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Answer 14

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Answer 15

Ch. 12 - Prob. 1RQ Ch. 12 - Prob. 2RQ Ch. 12 - Prob. 3RQ Ch. 12 - Prob. 4RQ Ch. 12 - Prob. 5RQ Ch. 12 - Prob. 6RQ Ch. 12 - Prob. 7RQ Ch. 12 - Prob. 8RQ Ch. 12 - Prob. 9RQ Ch. 12 - Prob. 10RQ

The cournot-Nash equilibrium of the market.

The cournot-Nash equilibrium of the market.

The equilibrium quantity when the firm 1 has the constant MC and AC of $25 and Firm 2 has $40.

The willingness to invest by firm 2 in order to decrease the marginal cost to $25.

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Chapter 12 Solutions