Two firms, A and B are Cournot competitors with zero costs. Let demand for good Q be Q-100 0.5P, where P is price. Find the Nash equilibrium for this model? QAQB-18.8 QA-QB 24.4 M O QA-QB-33.3 QA-QB-40.4
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- 12. Two firms with differentiated products are competing in price. Firm A and B face the following demand curves: QA = 90 – 2PĄ + Pg and QB = 140 – 2Pg + PA respectively. Assume production is costless. a. Give equations for and graph each firm's reaction curve. b. If both firms set their prices at the same time, what is the Nash equilibrium price, quantity, and profit for each firm? c. Suppose A sets its price first and then B responds. What price and quantity does each firm set now? Is it advantageous to move first? d. Compare the profits from part b and c. Which firm benefits more from the sequential price choosing?Cournot competition: P=200-Q (hint: Q is industry output), both firms have constant MC=5. What are the Nash Equilibrium price and quantity for both firms? Please show all stepsIn the mobile phone market, Samsung and Apple constitute a duopoly in the production of devices.The American firm has the following demand q_a = 10 - p_a + 0.25p_s, and the Korean firm, q_s = 20 -p_s+ 0.5p_a. Because both firms assembly their devices in China, their cost structure is the same andequal to ?(q) = 10q, answer the following questions.a) What would be the equilibrium (quantity, price, and profit) in this market, and interpret youranswer.b) If they decide to form a cartel, what are the new quantities, prices, and profits?
- 11. Suppose there is a duopoly of two identical firms, A and B, facing a market inverse demand of P = 140 – 0.5Q, and cost functions of CA = 20QA and Cg = 20QB respectively. a. Find the Cournot-Nash equilibrium and profit for each firm. b. Suppose that A acts as the leader in a Stackelberg model and B responds. What are the respective quantities and profits of each firm now? Is it advantageous to move first? c. If the firms were able to collude, how much additional profit could they earn if they switch from simple single pricing to perfect price discrimination? d. Graph and label equilibria on the inverse demand.Consider a homogeneous good duopoly with linear demand P(q) = 12- q,where q is the total industry output, and constant marginal costs c = 3. 1. Suppose that firms simultaneously set quantities. Determine the equilibrium (price, quantities, profit, welfare). 2. The firms consider to merge although their production costs are not affected. Determine the optimal price and quantity after merger. 3. Is such a merger profitable? 4. What are the welfare effects of such a merger?Title 1. Two firms have costs of AC 1 = MC 1 = 20 and AC 2 = MC 2 = 16 respectively. Market demand is Q =. Description 1. Two firms have costs of AC1 = MC1 = 20 and AC2 = MC2 = 16 respectively. Market demand is Q = 1000 − 40P. a. Suppose irms practice Bertrand competition, that is, setting prices for their identical products simultaneously. Compute the Nash equilibrium prices. (To avoid technical problems in this question, assume that if irms both have the same price, then the low-cost irm makes all the sales.) b. Compute irm output, irm proit and market output. c. Is total welfare maximised in the Nash equilibrium? If not, suggest an outcome that would maximise total welfare, and compute the deadweight loss in the Nash equilibrium compared with your outcome.
- All question are with regards to the following set up. There are two firms A and B. Firms compete in a Cournot Duopoly in Karhide. They set quantities qa and qB. Inverse demand is P(qA + qB) = 18 – qA – qB and costs are C(q) (in Karhide,) and firm A is a foreign firm (from Orgoreyn.) The government of Karhide engages in a strategic trade intervention by giving firm B a per unit subsidy of s. (That is, when firm B produces and sells qB units, firm B receives a payment of s * qB from the government.) You must show your work at each step, unless the questions is followed by "No work required." 3 * q for both firms. Firm B is a domestic firm (4) We now consider the government’s choice of s≥0. We can see from above thatprofits and outputs depend upon s. With that in mind, let πB(s) and qB(s) denote firm B’s profit and output as a function of the subsidy s. Let qA(s) denote firm A’s equilibrium output as a function of s. Let G(s) = πB(s) − s*qB(s) denote the government’s objective…Short Answer Question: Consider a Bertrand Duopoly Model. Market demand curve is given by Q = 200 – P., Firm A has a marginal cost of S20 and Firm B has a marginal cost of $50. In equilibrium, what is the market price? How many units does each firm produce? Calculate each firm's profit.Exercise A.2 . Sinergy and Dinaco are the only two companies in a high-tech industry. They are faced with the following matrix of results when deciding their research budget: After analizing the graph, answer the following questions... a) Does Sinergy have a dominant strategy? Reason your answer. b) Does Dinaco have a dominant strategy? Reason your answer. c) Is there a Nash equilibrium in this scenario? Reason your answer.
- Two firms Intel and AMD in the CPU market have combined demand given by Q = 100 - P. Their total costs are given by TC Intel = 4 Q Intel + 2 Q Intel^2 and TC AMD = 4 Q AMD + 2 Q AMD^2. If they successfully collude, the market price will be??Jet Blue and Southwest Airlines are competitors and must decide if they are going to charge a baggage fee to passengers. Use the table below to answer the following questions. Southwest- Jet Blue Baggage Fee No Fee Baggage Fee SW - 600 JB-600 SW - 250 JB - 750 No Fee SW - 750 JB - 200 SW-450 JB - 400 1. Is there a Nash equilibrium, and if yes, where is it? 2. If these firms were able to successfully signal, would that change the outcome of the game? Explain your answer. 3. Does either player have a dominant strategy, and if yes, what is it?Two firms with differentiated products are competing in price. Firm A and B face thefollowing demand curves: Q_A = 70 − 2P_A + P_B and Q_B = 120 − 2P_B + P_Arespectively. Assume production is costless.a. Give equations for and graph each firm’s reaction curve.b. If both firms set their prices at the same time, what is the Nash equilibriumprice, quantity, and profit for each firm?c. Suppose A sets its price first and then B responds. What price and quantitydoes each firm set now? Is it advantageous to move first?d. Compare the profits from part b and c. Which firm benefits more from thesequential price choosing? (Please do b-d, thanks :))
