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 = 20Q1 TC2 = 30Q2 MC1 = 20 MC2 = 30 Assuming a Cournot Duopoly, the following response functions are derived: Firm 1: Q1 = 8 – 0.5Q2 Firm 2: Q2 = 7 – 0.5Q1 Using this information, calculate the quantity produced for each firm, the price, and profits for each firm and the market as a whole.
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Suppose we have a duopoly with Firm 1 and Firm 2 and the following inverse
P = 100 – 5(Q1 + Q2)
Total Cost and Marginal Cost values for firms 1 and 2 are:
TC1 = 20Q1
TC2 = 30Q2
MC1 = 20
MC2 = 30
Assuming a Cournot Duopoly, the following response functions are derived:
Firm 1: Q1 = 8 – 0.5Q2
Firm 2: Q2 = 7 – 0.5Q1
Using this information, calculate the quantity produced for each firm, the price, and profits for
each firm and the market as a whole.
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- Suppose a market is served by two firms (a duopoly) The market demand function given by P = 1200 - O_{1} - O_{2} where is the output produced by firm 1 and is the output produced by firm 2 Q_{1}*Q_{2} Firm I's cost of production is given by the function C(Q_{1}) = 120Q_{1} and firm 2's cost of production is given by the function C(Q_{2}) = 120Q_{2} The average cost of firm is given by A*C_{1} = 120 and the average cost of firm 2 is given by A*C_{2} = 120 Marginal profit function for firm 1 (d*pi_{1})/(Delta*Q_{1}) = 1080 - 2Q_{1} - Q_{2} Marginal profit function for firm 2 (Delta*pi_{2})/(Delta*Q_{2}) = 1080 - Q_{1} - 2Q_{2} What will be the equilibrium profit levels earned by the stackelberg leader firm and the stackelberg follower firm?Suppose a market is served by two firms (a duopoly). The market demand function given by P = 1200 - Q_{1} - Q_{2} where Q_{1} is the output produced by firm and Q_{2} is the output produced by firm 2 . Firm cost of production is given by the function C(Q_{t}) = 120Q_{t} and firm 2's cost of production is given by the function C(Q_{2}) = 120Q_{2} The average cost of firm 1 is given by A*C_{1} = 120 and the average cost of firm 2 is given by A*C_{2} = 120 Marginal profit function for firm 1: Delta pi 1 Delta Q 1 equiv1080-2Q 1 -Q 2; (d*pi_{2})/(Delta*Q_{2}) = 1080 - Q_{1} - 2Q_{2} Marginal profit function for firm 2: What will be the equilibrium profit levels earned by the Stackelberg leader firm and the Stackelberg follower firm?Suppose that Raleigh and Dawes are the only sellers of bicycles in the UK. The inverse market demand function for bicycles is ?(?)=200−2?. Both firms have the same total cost function: ??(?)=12? and the same marginal cost: ??(?)=12.Suppose this market is a Stackelberg oligopoly and Raleigh is the first mover.a) Write down a formula for the reaction function of Dawes.b) Calculate the equilibrium quantity that each firm produces and the equilibrium price in the market.c) At the Stackelberg equilibrium, how much profit does each firm make?Suppose now that the two firms decide to act like a single monopolist.a) What will the total quantity of bicycles sold in the market be and what will the equilibrium price be? Represent the profit maximisation problem on a graph and indicate the price and quantity at the equilibrium.b) Calculate the total profit made by the two firms when they act like a monopoly. Compare it with the total profit they were making in the Stackelberg oligopoly.c) For the…
- 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 a Cournot duopoly with the following inverse demand function: P = 4,000 – 4Q1 - 4Q2. The firms' marginal costs are identical and are given by MC¡(Q¡) = 120QI. Based on this information, firm 1 and 2's reaction functions are Multiple Choice r1(Q2) = 485 - 0.5Q2 and r2(Q1) = 485 – 0.5Q1. r1(Q2) = 488 – 0.5Q2 and r2(Q1) = 488 – 0.5Q1. r1(Q2) = 33.3 – 0.25Q2 and r2(Q1) = 33.3 – | 0.25Q1. r1(Q2) = 288 - 0.5Q1 and r2(Q1) = 288 – %3D %3| 0.5Q2.What is the homogeneous-good duopoly Cournot equilibrium if the market demand function is Q=4,000-1,000p, and Firm l's and Firm 2's variable cost functions are V (q1) = 0.22qlandV (q2) = 0.22q2 , respectively. Select one alternative: Both firms produce 1300 units of outpuit. Both firms produce 1280 units of output. Both firms produce 1240 units of output. Both firms produce 1260 units of output.
- Consider the Cournot competition between two firms with different marginal costs. For firm 1, let the cost function be: C1(q1)-3*q1 For firm 2, let the cost function be: C2(q2)-6*q2 The inverse demand function is: P(Q)=12-Q, where Q=q1+q2 In this game, write down the profit functions for firm 1 and firm 2 (as functions of q1 and q2). Then, find the Nash equilibrium quantities for firm 1 and firm 2. In the NE, which firm produces more: the one with the low or the high marginal cost? Note: To get credit, you need to show your calculations and explain your answer.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 ____Consider a Cournot duopoly with the following inverse demand function: P = 100 - 2Q1 - 2Q2. The firms' marginal costs are identical and are given by MCi(Qi) = 2Qi. Based on this information, firm 1 and 2's reaction functions are: A. r1(Q2) = 24.5 - 0.5Q1 and r2(Q1) = 24.5 - 0.5Q2. B. r1(Q2) = 24.5 - 0.5Q2 and r2(Q1) = 24.5 - 0.5Q1. C. Q1 = 49 - 0.5Q2 and Q2 = 49 - 0.5Q1. D. Q1 = 49 - 0.25Q2 and Q2 = 49 - 0.25Q1. Please provide me with detail step by step process to get to the answer. coz no matter how many times I tried. my answer doesnt match the one in answer key
- Suppose the iceberg lettuce industry is a Cournot duopoly with two firms: Xtra Leafy (a) and Yummy Farms (y). Xtra Leafy produces q units of output and Yummy Farms produces qy units of output. Aggregate market output is Q = x + y. The (inverse) market demand schedule is: p = 176 - 2Q Both firms have identical cost structures: MC = MC₁ = ATC₂ = ATC₁ = $12 Find Xtra Leafy's Cournot reaction function of the form: 9x = a + bay Where "a" is the reaction function's intercept and "b" is its slope. Note: Please review the formatting instructions above. If any value is negative, be sure to include its negative sign. a. a= b. b = Hint: One of your answers will be negative. Think about why.Consider a Cournot duopoly with the following inverse demand function: P = 400 − 3Q1 − 3Q2 . The firms' marginal costs are identical and are given by MCi(Qi) = 2Qi. Based on this information, firm 1 and 2's marginal revenue functions are Multiple Choice MR1(Q1,Q2) = 400 − 6Q1 − 3Q2 and MR2(Q1,Q2) = 400 − 3Q1 − 6Q2. MR1(Q1,Q2) = 200 − 6Q2 and MR2(Q1,Q2) = 200 − 3Q1. MR1(Q1,Q2) = 200 − 3Q1 − 3Q2 and MR2(Q1,Q2) = 200 − Q1 − 3Q2. MR1(Q1,Q2) = 400 − 6Q1 − 6Q2 and MR2(Q1,Q2) = 400 − 6Q1 − 6Q2.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.