Suppose the inverse demand function for two Cournot duopolists is given by P = 10 −(Q1+ Q2) and their costs are zero. 1. What is each firm’s marginal revenue? 2. What are the reaction functions for the two firms? 3. What are the Cournot equilibrium outputs? 4. What is the equilibrium price?
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A: Inverse demand function: P = 10−(Q1+Q2)
Suppose the inverse demand function for two Cournot duopolists is given by P = 10 −(Q1+ Q2) and their costs are zero. 1. What is each firm’s marginal revenue? 2. What are the reaction functions for the two firms? 3. What are the Cournot equilibrium outputs? 4. What is the
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- Suppose the inverse demand function for two Cournot dupolists is given by P= 10 – (Q1+Q2) and their cost are zero.a) What is each firm marginal revenue?b) What are the reaction function for the two firmsc) What are the Cournot equilibrium outputd) What is the equilibrium price?A community's demand for monthly subscription to a streaming music service is shown by the following table. Assume that there are only two firms serving this market (Firm A and Firm B), each firm offers the same quality of service and music selection, and that each firm’s marginal cost is constant and equal to 0 (zero). (please refer to table provided) If this market were highly competitive instead of a duopoly, the quantity of streaming movie subscriptions purchased each month would be ______ If the two firms agreed to each supply one half of the quantity a monopoly would supply, the contract would specify that each firm would supply ____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.]
- Cournot duopolists face a market demand curve given by P = 60 – 1/2Q, where Q is total market demand in units. Each firm can produce output at a constant marginal cost of $15/unit. a) What is the equilibrium price and quantity produced by each firm? b) What if the firm's engaged in Bertrand competition? c) What if one of the firms chose its quantity before its competitor? What is the name for this sort of competition? d) Which of the three forms of competition gives the greatest social surplus?There are two firms selling differentiated products. Firm A faces the following demand for his product: QA=20-1/2PA+1/4PB Firm B faces the following demand: QB=220-1/2PB+1/4PA PA represents the price set by firm A. PB represents the price set by firm B.Assume that the marginal cost is zero both for firm A and firm B.What are the equilibrium prices of a simultaneous price competition?What would the equilibrium prices be if A is the leader and B is the follower?1. marginal costs e, = c, = c, = 20. The inverse demand function is given by P = 100 - Q. where Q = q, + 4: + 93- Consider a market with three firms (i - 1, 2, 3). which have identical a) Identify the reaction functions for each firm and compute the Cournot equilibrium, i.e., the market price and quantity. b) What happens to the market price if all three firms merge compared to part (a)?
- QUESTION 1A) Two cournot competitors face inverse demand P = 50 - Q. Where, Q = q1+q2, is the total output of firms 1 and 2. What are the equilibrium output levels for q1 and q2, If firm 1 marginal cost is 1, and firm 2's marginal cost is 12? QUESTION 1B. Continuing with the inverse demand, P = 50 - Q, if each firm has a marginal cost of 0, what is the difference between the equilibrium price under Cournot competition and under Bertrand competition? b. C. d. a. The Cournot price is higher than the Bertrand price by 50. The Cournot price is lower than the Bertrand price by 25. The Cournot price is higher than the Bertrand price by 50/3. Equilibrium prices under Cournot and Bertrand are the same, so the difference is zero.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 a Cournot duopoly. The market demand function is P = 180 – 2(q₂ + q₂), where P is the market price, q₂ is the output produced by Firm 1 and q₂ is the output produced by Firm 2. The two firms have a constant marginal cost c = 30. What is the total output in this market? Round your answer to the nearest integer (e.g. 50)
- A) Suppose there are just two firms, 1 and 2, in the oil market and the inverse demand for oil is given by P = 90 – 3Q. The marginal cost for each firm is €18. Calculate the level of output that each firm would produce at the Cournot equilibrium. B) Suppose there are just two firms, 1 and 2, in the oil market and the inverse demand for oil is given by P = 60 – Q. The marginal cost for each firm is €36. What price should Firm 1 charge at the Cournot equilibrium? C) Consider the production function Q = 10KL. Will the MRTS for this production function remain constant along the Q = 200 isoquant? Explain briefly.Q3. There are two firms selling differentiated products. Firm A faces the following demand for his product: e, = 20 – -P, + -P, 2. Firm B faces the following demand: 1 P. +-P, 2. 0, = 220- Assume that the marginal cost is zero both for firm A and firm B. What are the equilibrium prices of a simultaneous price competition? What would the equilibrium prices be if A is the leader and B is the follower?Suppose the inverse demand function for two Cournot duopolists is given by P = 10 – (Q1 + Q2) and their costs are zero. A. What is each firm’s marginal revenue and reaction functions? B. Determine the Cournot equilibrium outputs and equilibrium price. What is the implication of this model?
