Suppose two firms, Firm A and Firm B, are competing by setting quantities (Cournot competition). Firm A has a constant marginal cost of $10 per unit; Firm B has a constant marginal cost of $15 per unit. Assume fixed costs are equal to 0 for both firms. Hint: since fixed costs are zero and the marginal cost is constant, MC = AC.The two firms choose between producing 50 units or 100 units. If the total output is 100 units, the price is $20 per unit; if total output is 150 units, the price is $15 per unit; if total output is 200 units, the price is $10 per unit. Based on the information provided, fill in the firms’ profits in the payoff matrix below with Firm A choosing the row and Firm B choosing the column. QB=100 QB=50 QA=100 , ,QA=50 , ,The resulting equilibrium is for Firm A to produce ____ (50 or 100)units and Firm B to produce_____ (50 or 100) units. Suppose two firms, Firm A and Firm B, are competing by setting quantities (Cournot competition). Firm A has aconstant marginal cost of $10 per unit; Firm B has a constant marginal cost of $15 per unit. Assume fixed costs areequal to 0 for both firms. Hint: since fixed costs are zero and the marginal cost is constant, MC = AC.The two firms choose between producing 50 units or 100 units. If the total output is 100 units, the price is $20 perunit; if total output is 150 units, the price is $15 per unit; if total output is 200 units, the price is $10 per unit.Based on the information provided, fill in the firms' profits in the payoff matrix below with Firm A choosing the rowand Firm B choosing the column.QB=100QA=100QA=50QB=50The resulting equilibrium is for Firm A to produce◆ units and Firm B to produce◆ units.

In a Cournot Duopoly Model both the firms in the market simultaneously choose the profit maximizing…

Answered: Suppose two firms, Firm A and Firm B,…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Question

Suppose two firms, Firm A and Firm B, are competing by setting quantities (Cournot competition). Firm A has a constant marginal cost of $10 per unit; Firm B has a constant marginal cost of $15 per unit. Assume fixed costs are equal to 0 for both firms. Hint: since fixed costs are zero and the marginal cost is constant, MC = AC.

The two firms choose between producing 50 units or 100 units. If the total output is 100 units, the price is $20 per unit; if total output is 150 units, the price is $15 per unit; if total output is 200 units, the price is $10 per unit.

Based on the information provided, fill in the firms’ profits in the payoff matrix below with Firm A choosing the row and Firm B choosing the column.

	Q_B=100		Q_B=50
Q_A=100		,		,
Q_A=50		,		,

The resulting equilibrium is for Firm A to produce ____ (50 or 100)units and Firm B to produce_____ (50 or 100) units.

Suppose two firms, Firm A and Firm B, are competing by setting quantities (Cournot competition). Firm A has a
constant marginal cost of $10 per unit; Firm B has a constant marginal cost of $15 per unit. Assume fixed costs are
equal to 0 for both firms. Hint: since fixed costs are zero and the marginal cost is constant, MC = AC.
The two firms choose between producing 50 units or 100 units. If the total output is 100 units, the price is $20 per
unit; if total output is 150 units, the price is $15 per unit; if total output is 200 units, the price is $10 per unit.
Based on the information provided, fill in the firms' profits in the payoff matrix below with Firm A choosing the row
and Firm B choosing the column.
QB=100
QA=100
QA=50
QB=50
The resulting equilibrium is for Firm A to produce
◆ units and Firm B to produce
◆ units.

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions