Consider a Cournot duopoly, the firms face an (inverse) demand function: Pb = 530 - 17 Qb.The marginal cost for firm 1 is given by mc1 = 12 Q.The marginal cost for firm 2 is given by mc2 = 9 Q. (Assume firm 1 has a fixed cost of $ 157 and firm 2 has a fixed cost of $ 113 .) How much DWL does the duopoly cause ? Answer: 500.67
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Consider a Cournot duopoly, the firms face an (inverse) demand function: Pb = 530 - 17 Qb.
The marginal cost for firm 1 is given by mc1 = 12 Q.
The marginal cost for firm 2 is given by mc2 = 9 Q.
(Assume firm 1 has a fixed cost of $ 157 and firm 2 has a fixed cost of $ 113 .)
How much DWL does the duopoly cause ? Answer: 500.67
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- Question 2 Consider a Cournot duopoly, the firms face an (inverse) demand function: Pb=268-10Qb. The marginal cost for firm 1 is given by mc1= 6Q The marginal cost for firm 2 is given by mc2=4Q (Assume firm 1 has a fixed cost of $102 and firm 2 had a fixed cost of $104 What are the profits of firm 2? (hint 567.26) How much consumer surplus is created by industry transactions? (hint 1333.34) Full explain this question and text typing work only We should answer our question within 2 hours takes more time then we will reduce Rating Dont ignore this line ...Two firms, App and Sam, producing a good named Smart 13 compete in a Stackelberg duopoly. The inverse demand equation is P=25-(9,+92) the total cost function for Sam (the follower) is TC2=3q2. Determine the leader's maximum profit. The total cost function for App (the leader) is TC1 =1q1, and Moving to another question will save this response. Question 6 of 22Ugly Dolls Inc. (UD) is a firm in Mytown that sells its products on a market under monopolistic competition. The cost function of UD is represented by TC = 100+10Q. Lately, because of the UD is making a big amount of profit, some firms enter the market to compete. Assume that Mytown engages in free trade in the dolls markets with Yourtown, who also faces a market with monopolistic competition. Because of this we can expect that, (a) The numbers of firms operating in this market will not change. (b) At equilibrium the profit of firms will increase. (c) The quantity of types of dolls available to consumers will increase. (d) All the above answers are correct.
- Consider the following Cournot duopoly. Both firms produce a homogenous good. The demand function is Q = 100 -2P, where Q is the total quantity produced. Firm 1's cost function is TC(q,)=59, + 1. Firm 2's marginal cost of production is c =6 with probability 0.5 and c5 =3 with probability 0.5. Firm 2 knows its own cost function and firm 1's cost function. Firm 1 knows its own cost function and the probability distribution of firm 2's marginal cost. How much does firm 2 produce in a Bayesian Nash Equilibrium? O 175/6 if the marginal cost is high and 193/6 if the marginal cost is low O 86/3 if the marginal cost is high and 98/6 if the marginal cost is low O 92/3 98/6The market demand curve faced by Stackelerg duopolies is: Qd = 12,000 - 5P where Qd is the market quantity demanded and P is the commodity's price in dollars. Firm A's marginal cost is: MCa = 0.08qa where MCa is Firm A's marginal cost in dollars and qa is the quantity of output produced by Firm A. Firm B's marginal cost equation is: MCb = 0.1qb where MCb is Firm B's marginal cost in dollars and qb is the quantity of output produced by Firm B. Because of Firm A's lower marginal cost, Firm B has conceded the power to move first to Firm A. a. Given Firm B will move second, what is the equation for Firm B's reaction function with qb expressed as a function of qa? b. Given Firm A can move first, what quantity of output will Firm A produce? c. What quantity of output will firm B produce? What price will be established for the commodity?Consider a duopoly, i.e., an industry with only two firms: firm A and firm B, making the same product. The industry’s inverse demand is P(Q)=320−(1/5)Q, where P is the market price and Q is the total industry output. Each firm has a marginal cost MC of $20. There are no fixed costs and no barriers to exit the market. a) Suppose that the two firms engage in Cournot competition. Find the equilibrium price PNE in the industry, the equilibrium outputs QANE and QBNE, as well as the profits πANE and πBNE, for each firm. b) Suppose the marginal cost for firm B increases from $20 to $140, while everything else remains unchanged. Find the new equilibrium price PNE in the industry, the new equilibrium outputs QANE and QBNE, as well as the new profits πANE and πBNE for each firm. c) Suppose that, in addition to the marginal cost increase from $20 to $140 from sub question b), firm B also has a fixed cost of $2500, out of which $2100 may be recouped if it shuts down; everything else remains…
- Consider a Cournot Oligopoly. One firm has costs C1(Q1) = 12Q1 while the other firm’s cost function is C2(Q2) = 10Q2. The demand for both firms’ products Q=Q1 +Q2 isQD(P)=200−2P. (a) Determine the equilibrium price P, the market shares s1, s2, and the quantities Q1, Q2 produced by both firms. (b) Suppose more firms with the lower cost technology, i.e., with cost function Ci(Qi) = 10Qi enter the market. How many firms with this technology must be in the market such that firm 1’s profit becomes negative. In other words, suppose there is one firm with the high costs, and n firms with the low costs. At what level n will profits of the high-cost firm be negative?Consider a Duopoly model, in which two firms decide a quantity simultaneously. The market demand is given by P=120 - 3Q, where Q is the total output (i.e., Q=Q1+Q2). Each firm has an identical cost function, TCi=12Qi, i=1, 2. If Firm 1 believes Q2=12, Firm 1 should sell Q1= _____ units in order to maximize its profit.Suppose we have a duopoly with Firm 1 and Firm 2 and the following inverse demand function:P = 100 – 5(Q1 + Q2)Total Cost and Marginal Cost values for firms 1 and 2 are:TC1 = 20Q1TC2 = 30Q2MC1 = 20MC2 = 30Assuming a Cournot Duopoly, the following response functions are derived:Firm 1: Q1 = 8 – 0.5Q2Firm 2: Q2 = 7 – 0.5Q1Using this information, calculate the quantity produced for each firm, the price, and profits foreach firm and the market as a whole.
- Two firms compete in a single market (duopoly) with demand given by QD=60-P. The two firms have identical cost functions, C(q)=2q. If the two firms compete via Bertrand (price) competition, then each will charge a price of $ If the two firms compete via Cournot (quantity) competition, then each firm will produce in the market will be $ ✓. Each firm's profit will be $ Suppose rather than compete, the two firms collude. In this case, the price in the market will be $ a profit of $ ✓ units and the equilibrium price ✓ and each firm will earnA duopoly faces a market demand of p= 120 - Q. Firm 1 has a constant marginal cost of MC' =S10. Firm 2's constant marginal cost is MC = S20. Calculate the output of each firm, market output, and price if there is (a) a collusive equilibrium or (b) a Cournot equilibrium. The collusive equilibrium occurs where q, equals and q, equals (Enter numeric responses using real numbers rounded to two decimal places) Market output is The collusive equilibrium price is S The Cournot-Nash equilibrium occurs where q, equals and q2 equals Market output is Furthermore, the Cournot equilibrium price is SConsider a Cournot Duopoly model. The inverse demand for their products is given byP = 200 − 6Q, where Q is the total quantity supplied in the market (that is, Q = Q1 + Q2). Each firm has an identical cost function, given by TCi = 2Qi, for i = 1, 2.(a) In the Cournot model, what does each firm choose?(b) What is the timing of each firm’s decision?