Ca) = 0.07qi, ssuming no fixed costs for i = 1, 2. he Cournot equilibrium quantities are q1 and q2 = (enter your responses as whole numbers). he Cournot equilibrium price is $ (round to the nearest penny). alculate the Cournot profits: firm 1 $ and firm 2 $ (round both responses to the nearest cent).
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- You are given the market demand function Q= 3400 – 1000p, and that each duopoly firm's marginal cost is $0.28 per unit, which implies the cost function: C(4:) = 0.28qi, assuming no fixed costs for i = 1, 2. The Cournot equilibrium quantities are q, and 92 (enter your responses as whole numbers).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.V5. You are the manager of Taurus Technologies, and your sole competitor is Spider Technologies. The two firms' products are viewed as identical by most consumers. The relevant cost functions are C(Qi) = 2Qi, and the inverse market demand curve for this unique product is given by P =290 - 3Q. Currently, you and your rival simultaneously (but independently) make production decisions, and the price you fetch for the product depends on the total amount produced by each firm. However, by making an unrecoverable fixed investment of $500, Taurus Technologies can bring its product to market before Spyder finalizes production plans. (Assume Taurus Technologies is the leader in this scenario.) What are your profits if you do not make investment? What are your profits if you do make investment? Instructions: Do not include the investment of $500 as part of your profit calculation. Should you invest the $500? no or yes
- Firms 1 and 2 produce a homogeneous product in the market, with market demand dQ=200-p. Each firm i ci=1,2) has the cost function C CQ₂) = 40 +20- Q₂, where Qt is firm i's output. (a). what is the Cournot equilibrium output per firm and price in this market? You (b). What would the equilibrium price in this market be if the two firms collude to 9291 Set outputs to maximize total industry profits? (C). Suppose firm I is the leader and chooses output first, while firm 2 is the follower and sets output af after observing firm I's output. What would be the Noutputs and price in the S Stackelberg equilibrium?The marginal cost of a product is fixed at MC = 20. The demand for the product is Q = 100 - 2P. (a) Now consider a Cournot model with two firms that are choosing quantities simultaneously. What is the best reply (best response) function for each firm? What is theNash equilibrium? What is the total surplus? (b)What do you expect the total surplus would be with three firms? Why? (You do not need to calculate an exact value. You can say ”total surplus is at least 100”, or ”total surplus is at most 80”)Consider a Cournot Oligopoly. One firm has costs C1(Q1) = 12Q1 while the other firm’s cost function is C2(Q2) = 10Q2. The demand for both firms’ products Q=Q1 +Q2 isQD(P)=200−2P. (a) Determine the equilibrium price P, the market shares s1, s2, and the quantities Q1, Q2 produced by both firms. (b) Suppose more firms with the lower cost technology, i.e., with cost function Ci(Qi) = 10Qi enter the market. How many firms with this technology must be in the market such that firm 1’s profit becomes negative. In other words, suppose there is one firm with the high costs, and n firms with the low costs. At what level n will profits of the high-cost firm be negative?
- Consider a market that only includes two large firms. The (inverse) market demand is P = 100 – Q. 3q2. Firm 1 has a cost function of C, = 2q1, and firm 2 has a cost function of C2 Use a Cournot model to calculate the Nash equilibrium outputs q, and q2 of the two firms. and 92 (a) Give each firm's profit as a function of (b) Compute the Nash equilibrium q, and q2.You are given the market demand function Q = 1500-1000p, and that each duopoly firm's marginal cost is $0.20 per unit, which implies the cost function: C(qi) = 0.20qi, assuming no fixed costs for i = 1, 2. The cooperative Cournot quantities are q₁ and 92 = The cooperative Cournot price is $ (round to the nearest penny). Calculate the cooperative Cournot profits: firm 1 $ and firm 2 $ (enter your responses as whole numbers). (round both responses to the nearest cent).You are the manager of Taurus Technologies, and your sole competitor is Spyder Technologies. The two firms' products are viewed as identical by most consumers. The relevant cost functions are CQ) = 4Q₁, and the inverse market demand curve for this unique product is given by P= 340 -2 Q. Currently, you and your rival simultaneously (but independently) make production decisions, and the price you fetch for the product depends on the total amount produced by each firm. However, by making an unrecoverable fixed investment of $400, Taurus Technologies can bring its product to market before Spyder finalizes production plans. (Assume Taurus Technologies is the leader in this scenario.) What are your profits if you do not make the investment? $ What are your profits if you do make the investment? Instructions: Do not include the investment of $400 as part of your profit calculation. $ Should you invest the $400? Ⓒ Yes - the benefits of establishing the first-mover advantage exceed the cost. O…
- Firm 1 and firm 2 compete with each other by choosing quantities. The market demand is given by 400-Q, if Q< 400 P(Q) = " otherwise where Q = 91 +92. Firm 1 has a cost function C₁ (91) = 40q1, and firm 2 has a cost function C2 (92) = 5092. Answer the following questions. 1) Assume the game lasts only one period. Compute the approximate equilibrium profits for both firms. 2) If firm 1 becomes the monopolist on this market, what quantities will firm 1 choose to produce? Denote this quantity as QM. 3) One possible strategy is that each firm produces. This gives a more Pareto efficient outcome. But given that firm 2 produces this quantity, how much does firm 1 want to produce? 4) Assume this game is infinitely repeated and the interest rate in this economy is r. For what values of r the strategy in (3) is sustainable by using a "Grim Trigger" strategy?Suppose Giocattolo of Italy and American Toy Company of the United States are the only two firms producing toys for sale in the U.S. market. Each firm realizes constant long-term costs so that the average total cost (ATC) equals the marginal cost (MC) at each level of output. Thus, MCo = ATCO is the long-term market supply schedule for toys. Suppose Giocattolo and American Toy Company operate as competitors, and the cost schedules of each company are MCo = ATCO = $10. On the following graph, use the grey point (star symbol) to identify the competitive market equilibrium. Then, use the green triangle (triangle symbols) to identify consumer surplus in this case. Note: Select and drag the point from the palette to the graph. Dashed drop lines will automatically extend to both axes. Then select and drag the shaded region from the palette to the graph. To resize the shaded region, select one of the points and move to the desired position. ? PRICE (Dollars per toy) 20 18 16 14 10 00 6 4 2 0…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.