every firms marginal cost 30, and there is no fixed cost. Consumers only buy from the firm charging the lowest price. If there are multiple firms charging the same lowe price, then they will share the market equally. If firm 1 charges p1=100, and firm 2 charges p2-95, what price p3 below will be the best response for firm 37
Q: Firm 1 and Firm 2 are Stackelberg competitors. Firm 1 is the leader and Firm 2 is the follower. They…
A:
Q: Softco is a software company that sells a patented computer program to businesses. Each business it…
A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…
Q: Your software startup has just completed the latest version of BrainType, a mind-reading word…
A: A competitive analysis ought to give the business person data about how contenders market their…
Q: Q1 = 150 - 3P1 + P2 + P3 Q2 = 180 + P1 - 4P2 + 2P3 Q3 = 200 + 2P1 + P2 - 5P3 and TC = Q12 + Q1Q2…
A: Inverse demand function P = f(Q) is the Lagrange multiplier P=f(Q) =Q12+Q1Q2+2Q22+Q2Q3+Q32+Q1Q2…
Q: You operate a Caribbean destination resort. You currently offer plans for a cruise departing from…
A: Mixed bundling is a strategy in which a customer is allowed to purchase the goods either together as…
Q: You are the manager of a local sporting goods store and recently purchases a shipment of 60 sets of…
A: Total 60 Sets of skis and ski bindings. Total cost = $25000 Maximum revenue if we charge a…
Q: Consider a market for used computer printers, where buyers value good ones at $1,000 and bad ones at…
A: We have cost of warranties $20 for good quality and $45 for bad quality.
Q: Two firms compete in a homogeneous product market where the inverse demand function is P = 20 − 5Q…
A: Since, you have posted a question with multiple sub-parts, we'll solve first three sub-parts for…
Q: The average consumer at a firm with market power has an inverse demand function of P 10 - 2G The…
A: Given:P=10-2QC=5QNow,MC=∂C∂QMC=5
Q: Sonia Music Entertainment (SME) is an American company that holds copyrights of popular songs.…
A: Marginal cost of itone is = w Marginal cost of SME = 0
Q: AVAC is the only pharmaceutical firm producing a Vaccine. The Demand Curve for its product is Qd…
A: Hello. Since your question has multiple sub-parts, we will solve first three sub-parts for you. If…
Q: Suppose we have two identical firms A and B, selling identical products. They are the only firms in…
A: The Bertrand competition model represents an oligopolistic market structure in which each firm makes…
Q: What can you say about the fares, number of travelers and profit of Ghana Airways Company Limited,…
A: The total cost faced by the company is as follows.
Q: Two firms compete in a homogeneous product market where the inverse demand function is P = 20 -5Q…
A: Current price = $15, output will be:P=20-5Q15=20-5Q5Q=20-155Q=5Q=55Q=1 millions By dividing the…
Q: Amir operates a large lobster boat. The operating cost for the boat is $2,250 each day. At the end
A: *Answer:
Q: manager of a firm that produces products X and Y at zero cost. Knowing different types of consumers…
A: A. When the firm priced each product separately and since the marginal cost is zero, therefore…
Q: I understand the other parts. Can you please answer part d and e below? Each of two firms, firms 1…
A: (d)It is given that,Inverse demand function: P = 120 – Q where Q = q1 + q2.Cost function:Firm 1:…
Q: AVAC is the only pharmaceutical firm producing a Vaccine. The Demand Curve for its product is Qd =…
A: If there is only 1 seller in market, it is a monopoly structure, with following characteristics:…
Q: Assume a firm faces two customers in the market. Customer 1 has an inverse demand of p= 120 - 91.…
A: Given; Customer 1 has a inverse demand function; p=120-q1 or q1=120-p Customer21 has a inverse…
Q: You are the manager of a firm that produces products X and Y at zero cost. You know that different…
A: Since, you have posted a question with the multiple sub-parts, we'll solve first two sub-parts for…
Q: Two firms compete as a Stackelberg duopoly. The demand they face is P = 402 - Q. The cost function…
A: b P=402-QP=402-(Q1+Q2) =402-Q1-Q2C1=2Q1MC1=2TR1=(402-Q1-Q2)Q1…
Q: Yummy Yummy Popcorn, Inc. sells bags of flavored popcorn in a popular mall. As shop owner and…
A: Answer: Given, Demand function: Q=1,200-800P+2AA=$500Current price=$1.50 per bagMarginal cost…
Q: If both firms operate independently and do not collude, the most likely economic profit is Multiple…
A: Firm A has a dominant strategy of choosing a low price in every situation. So if Firm A is choosing…
Q: (Stackelberg model) In a duopoly industry, there are only two firms, firm 1 is the industry leader,…
A:
Q: Air conditioning installers value good ACs at $4,100 and bad ones at $3,400, while buyers value good…
A: Before selling any product in the market, the producers or retailers are obligated morally and…
Q: & The market demand is Q(P) = 10 - P, there are N+1 firms, one firm, referred to as "Firm 1" has…
A: The total quantity desired for a given good by all consumers in a market is known as market demand.
Q: Suppose that two identical firms in a homogeneous-product market compete in prices. The capacity of…
A: Q(p) = 9 - p P = 9 - Q Firm 1 : TR = 9 q1 - q12 - q1q2 MR = 9 - 2q1 - q2 MC = 0 By equating MR =…
Q: Home Depot and Lowe's are in a price war on refrigerators. Refrigerators at Home Depot cost $1,000…
A: Given:Cost of Refrigerators at:Home Depot=$1000Lowe=$800Rebate on price difference=10%
Q: Three firms with identical marginal cost of 30 compete in a market with inverse demand of P = 50 -…
A: Demand: It refers to the consumption of goods and services in the economy. The more demand of the…
Q: A city with 24 households (12 Gnome households and 12 Kender households) has two distinct…
A: A city with 24 households (12 Gnome households and 12 Kender households) has two distinct…
Q: Firm 1 and Firm 2 are Stackelberg competitors. Firm 1 is the leader and Firm 2 is the follower. They…
A: It is a model of duopoly competition where the firm (who is follower) observes the decision of the…
Q: You are the manager of a local sporting goods store and recently purchased a shipment of 60 sets of…
A: Maximum earnings and benefits can be earned by selling the Skis and Ski bindings in a bundle because…
Q: In the Bertrand model, suppose that each firm has a marginal cost of £10 and that firm 1 sets a…
A: In the Bertrand model of competition, firms, in a market, will compete with each other by setting…
Q: Based on the best available econometric estimates, the market elasticity of demand for your firm’s…
A:
Q: AVAC is the only pharmaceutical firm producing a Vaccine. The Demand Curve for its product is Qd…
A: Being an only seller, this is a monopoly with following characteristics: 1. Single seller facing…
Q: A firm faces two groups of consumers with different demand equations as follows: Strong demander: Ps…
A: We are going to use two tariff pricing strategy to answer this question
Q: Two companies produce similar items for the same market. Company 1 produces 9₁ items and Company 2…
A:
Q: You are the manager of a local sporting goods store and recently purchased a shipment of 60 sets of…
A:
Q: In a strategy meeting, the Chief Operating Officer (COO) discusses production planning for the next…
A: For Cournot Competition that is a quantity competition we find the profit functions of both firms…
Q: You are the manager of a firm that produces products X and Y at zero cost. You know that different…
A: When the firm charges $210 for the bundle of X and Y, then the profit can be calculated as follows:…
Q: Q)Firm A and B are Cournot competitors, who produce good x. Both firms have zero cost and demand is…
A: Total cost= 0 Demand function; X=215– P P=215– X where; X= Quantity…
Q: A company manufactures two products. If it charges price p1 for product 1 and price p2 for product…
A: The company manufactures two products and its TR (total revenue) will be the sum of the product of…
Q: Consider a single manufacturer (M) and a single retailer (R). Suppose the final demand function is…
A: Given: The demand function is: Q = 20-4p The M produces at: AC = MC = 2 To Find: The values of pr…
Q: Two firms, Firm 1 and Firm 2, compete by simultaneously choosing prices. Both firms sell an…
A: As we answer only three subparts but the question has more than 3 subparts, we would be answering…
Q: Q1 Market-clearing Prices Consider a standard position auction. There are two positions: Top (T) and…
A: Different parties may bid for the right to buy an item or service at an auction.Auctions are seen to…
Q: A local insurance company offers both home and auto insurance to four types of customers with the…
A: Bundling is defined as the method of clubbing two goods together, it gives the consumers an option…
Q: Two firms producing identical products may merge due to the existence on Multiple Choice O economies…
A: Economics is a branch of social science that describes and analyzes the behaviors and decisions…
2
Step by step
Solved in 2 steps
- Firm 1 and firm 2 are Bertrand duopoloists. Firm 1 has a marginal cost of $6.00 per unit, and firm 2 has a marginal cost of $8.01 per unit. The demand for their product is p=23.00−Q, where Q is the total quantity demanded. How much does each firm sell in equilibrium? Assume that prices can only be set to the nearest cent, firms split the market if they set the same price, and there are no fixed costs. Firm 1 production:______ Firm 2 production:______ What are the profits for each firm in equilibrium? Firm 1 profit: $______ Firm 2 profit: $______suppose there are two firms that compete in prices, say firms 1 and 2, but that the firms produce differentiated products. Suppose that the demand for firm 1 is q1(p1,p2)=10-2p1+p2 and the demand for firm 2 is q2(p2,p1)=10-2p2+p1. Also, assume that firm 1 has a constant marginal cost of c1 = 2 and firm 2 has a constant marginal cost of c2 = 3. i. Solve for the Bertrand equilibrium in prices. ii. Now, suppose firms 1 and 2 merge and firm 1 will operate both firms and they will split the resulting profits equally. Will both firms agree to this merger or do they prefer the Bertrand outcome?Suppose two firms compete as Bertrand duopolists for an identical product, where demand is given by Q = 5000 – 50P and both firms have marginal cost of 10 per unit of output. If firm 1 has capacity of 1500 and firm 2 has capacity of 2000, what will the equilibrium price be in this market?
- Consider two price-setting oligopolies supplying consumers in a certain region of a country. Firm 1 employs many of the people living there and the local government subsidizes its operations. In all other respects, the firms are identical-they have the same constant marginal cost, MC = 4, and produce the same good. The demand function for Firm 1 is q1 = 600 - 50p1 - 20p2 and for Firm 2 is q2 = 600 - 50p2 - 20p1, where p1 is Firm 1's price and p2 is Firm 2's price. a. What are the Nash-Bertrand equilibrium prices and quantities without the subsidy? b. What are they if Firm 1 receives a per-unit subsidy of S = 1? Compare the two equilibria.Two firms - firm 1 and firm 2 - share a market for a specific product. Both have zero marginal cost. They compete in the manner of Bertrand and the market demand for the product is given by: q = 20 − min{p1, p2}. 1. What are the equilibrium prices and profits? 2. Suppose the two firms have signed a collusion contract, that is, they agree to set the same price and share the market equally. What is the price they would set and what would be their profits? For the following parts, suppose the Bertrand game is played for infinitely many times with discount factor for both firms δ ∈ [0, 1). 3. Let both players adopt the following strategy: start with collusion; maintain the collusive price as long as no one has ever deviated before; otherwise set the Bertrand price. What is the minimum value of δ for which this is a SPNE. 4. Suppose the policy maker has imposed a price floor p = 4, that is, neither firm is allowed to set a price below $4. How does your answer to part 3 change? Is it now…Suppose the inverse demand for a particular good is given by P = 1200-12Q. Furthermore, there are only two firms, A and B. Firm A's marginal cost is a constant $25, and Firm B's marginal cost is a constant $20. Assume these two firms engage in Cournot competition. If we assume that the firm with the lowest costs could supply the entire market, then the deadweight loss due to the market power these two firms exert through Cournot competition equals $. 4 [Round your answer to the nearest two decimals.]
- Two firms are engaged in Cournot (simultaneous quantity) competition. Market-level inverse demand is given by P = 160 − 4Q Firm 1 has constant marginal costs of MC1 = 8, while Firm 2 has constant marginal costs of MC2 = 24. 1) Does there exist a low enough positive marginal cost for firm 1 such that firm 1 acts like a monopoly in this market, if so what is the MC if not why?Suppose Giocattolo of Italy and American Toy Company of the United States are the only two firms producing toys for sale in the U.S. market. Each firm realizes constant long-term costs so that the average total cost (ATC) equals the marginal cost (MC) at each level of output. Thus, MCo = ATCO is the long-term market supply schedule for toys. Suppose Giocattolo and American Toy Company operate as competitors, and the cost schedules of each company are MCo = ATCO = $10. On the following graph, use the grey point (star symbol) to identify the competitive market equilibrium. Then, use the green triangle (triangle symbols) to identify consumer surplus in this case. Note: Select and drag the point from the palette to the graph. Dashed drop lines will automatically extend to both axes. Then select and drag the shaded region from the palette to the graph. To resize the shaded region, select one of the points and move to the desired position. ? PRICE (Dollars per toy) 20 18 16 14 10 00 6 4 2 0…Suppose the total demand for specialty coffee per hour in Ruston is Q = 640 - 80P. There are six (n = 6) monopolistically competitive firms currently in the market selling some variety of specialty coffee, each with total cost curves given by: TC₁ = 20+q; +0.0125q²| a. Find the proportional demand faced by one coffee shop, denoted Firm i. That is, suppose the firms have equal market share and determine the demand function for a single firm. b. Calculate the optimal quantity produced by Firm i. c. Calculate Firm i's profits. Will there be entry or exit by other coffee shops over time? d. Provide a generic graph the long-run outcome for Firm i given your prediction from (c). Label curves, axes, and intersection points.
- There are two firms that are producing identical goods in a market characterized by the inverse demand curve P = 60 - 2Q, where Q is the sum of Firm 1's and Firm 2's output, q₁+q2. Each firm's marginal cost is constant at 12, and fixed cost are 0. Answer the following question, assuming that the firms are Cournot competitors. a. Calculate each firm's reaction function and illustrate them graphically (15 points) b. How much output does each firm produce? (12.5 points) c. What is the market price? (7.5 points) d. How much profit does each firm earn? What is the industry profit? (10 points)Ugly 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 two firms that provide a differentiated product, which they produce at the same constant marginal cost, MC = 3. The demand function for Firm 1 is q1 = 10 - p1-0.5p2 and for Firm 2 is q2 = 20 - p2 - 0.5p1, where p1 is Firm 1's price and p2 is Firm 2's price. What are the Nash-Bertrand equilibrium prices and quantities? If the two firms merged, what would be the new equilibrium prices and quantities, and how would they compare to the pre-merger prices?