2. Two companies (A and B) are duopolists that produce identical products. Demand for the products is given by the following demand function: P = 10,000 - QA- QB where QA and QB are the quantities sold by the respective firms and P is the selling price.. Total cost functions for the two companies are: TCA = 500,000 + 200Q A + .5Q A?? ТСВ 3 200,000+ 400 QB + QВ "? Assume that the firms form a cartel to maximize total industry profits (sum of Firm A and Firm B profits). Determine the optimum output and selling price for each firm.

2. Two companies (A and B) are duopolists that produce identical products. Demand for the products is given by the following demand function: P = 10,000 - QA- QB where QA and QB are the quantities sold by the respective firms and P is the selling price.. Total cost functions for the two companies are: TCA = 500,000 + 200Q A + .5Q A?? ТСВ 3 200,000+ 400 QB + QВ "? Assume that the firms form a cartel to maximize total industry profits (sum of Firm A and Firm B profits). Determine the optimum output and selling price for each firm.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter15: Imperfect Competition

Section: Chapter Questions

Problem 15.2P

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Assume that two companies (A and B) are duopolists that produce identical products. Demand for the products is given by the following linear demand functions:P=200-QA-QBwhere QA and QB are the quantities sold by the respective firms and P is the selling price. Total cost functions for the two companies areTCA = 1500+55 QA +QA2TCB = 1200+20 QB +2QB2Assume that the firms form a cartel and maximize total industry profits,a. Determine the optimal output and selling price for each firm.b. Determine Frim A, Firm B, and total industry profits at the optimal solution foundin part (a).c. Show that the marginal cost of the two firms are equal at the optimal solutionfound in part (a).
Assume that two companies (A and B) are duopolists who produce identical products. Demand for the products is given by the following linear demand function:P = 200 - QA - QBwhere QA and QB are the quantities sold by the respective firms and P is the sellingprice. Total cost functions for the two companies areTCA = 1500 + 55QA + Q2ATCB = 1200 + 20QB + 2Q2BAssume that the firms act independently as in the Cournot model (i.e., each firmassumes that the other firm’s output will not change).a. Determine the long-run equilibrium output and selling price for each firm.b. Determine Firm A, Firm B, and total industry profits at the equilibrium solutionfound in Part (a).
Only typed answer Two firms both produce leather boots. The inverse demand equation is given by P = 340 - 2Q, where P is the price of boots in USD/pair and Q is quantity of boots in million pair. The cost function is given by: C(Q) = 40Q. If the two firms are Stackelberg oligopolists), the output of the leader is equal to: 1) 60 2) 80 3) 75 4) 900
Assume that two companies (C and D) are duopolists that produce identical products. Demand for the products is given by the following linear demand function:P=1000−QC−QDwhere QC and QD are the quantities sold by the respective firms and P is the selling price. Total cost functions for the two companies are TCC=15,000+50QC TCD=10,000+75QD Assume that the firms act independently as in the Cournot model (i.e., each firm assumes that the other firm’s output will not change). Please, find the equilibrium output of firm C.
1. Suppose there are two firms who are Cournot duopolists (set quantity simultaneously) in the wine business. The inverse demand for wine is given by P(Q) = 300 – 0.20. One firm has marginal costs of $45 and the other firm has marginal costs of S30. What is the total output produced in the market?
Assume that two companies (C and D) are duopolists that produce identical products. Demand for the products is given by the following linear demand function:P = 600 - QC - QDwhere QC and QD are the quantities sold by the respective firms and P is the selling price. Total cost functions for the two companies areTCC = 25000 + 100QCTCD = 20000 + 125QDAssume that the firms act independently as in the Cournot model (i.e., each firm assumes that the other firm’s output will not change).a. Determine the long-run equilibrium output and selling price for each firm.b. Determine the total profits for each firm at the equilibrium output found in Part (a).
The market demand curve for a pair of Cournot duopolists is given as P= 34 - 2Q, where Q =Qq+ Q2 The constant per unit marginal cost is 16 for each duopolist. Find the Cournot equilibrium price, total quantity, and total profits. (Round your answers to 1 decimal place (e.g., 32.1).) Equilibrium Price: 5:40 Quantity: d Profits: < Prev 10 of 10 Next 00:21 14/02/202. ere to search acer
Imagine any market divided by 2 Cournot oligopolists who have identical costs Marginal cost = Average cost = 200. About this market, ask yourself: a) If the demand curve for this market is given by Q = 1250 - 2.5P, where Q is the total quantity demanded in the market and P is the selling price, both given in units, what is the reaction curve of the oligopolists? b) What will be the quantity produced and the selling price of the oligopolists? c) A strategist considers that a good marketing campaign would be able to expand the Demand of this market to Q = 1,500 - 2.5P and that in this way, oligopolists could produce the same amount and make significantly greater profits. Such a campaign would generate a reduction in profits in the order of 70,000. Is it worth making this investment in marketing?
Firm P has a monopoly on producing printers, and Firm C has a monopoly on producing computers. Printers and computers are complements, and Q is the number of bundles, with one printer and one computer in each bundle. Pp is the price of a printer, and Pc is the price of a computer. The demand function is Q = 10 – Pp – Pc, and marginal cost is zero. he two firms will choose prices to maximize profits, but neither firm knows the price charged by the other firm. Calculate Q, Pp, Pc, and profits for each firm.
Assume that two companies (A and B) are duopolists who produce identical products. Demand for the products is given by the following linear demand function: P= 200-Qa-Qb where QAQA and QBQB are the quantities sold by the respective firms and P is the selling price. Total cost functions for the two companies are TCa=1,500+55Qa+Qa2 TCb=1,200+20Qb+2Qb2 Assume that the firms form a cartel to act as a monopolist and maximize total industry profits (sum of Firm A and Firm B profits). In such a case, Company A will produce units and sell at $ . Similarly, Company B will produce units and sell at $ . At the optimum output levels, Company A earns total profits of $ and the marginal cost of Company B earns total profits of $ . Therefore, the total industry profits are $ . At the optimum output levels, the marginal cost of Company A is $ and the marginal…
3. Reuben and Simeon are duopolists producing jeans in a differentiated goods market. The market demand for Reuben's jeans is y₁ = 75 − P₁ + P2, while the market demand for 1 1 Simeon's jeans is y₂ = 75 − P2 + ₂P₁. Reuben's cost function is C₁(y₁) = 75y₁ while Simeon's cost function is C₂ (y₂) = 75y2. a) Calculate the Bertrand equilibrium in this market. Indicate each firm's price, output level, and profits. (Answer: p₁ = 100 USD, y₁ = 25 units) b) Find prices and output levels that would maximize joint profits, and calculate the maximum joint profits. c) Draw a payoff matrix using the results from a) and b) and determine the Nash equilibrium.