Considering that two competing companies sell a similar product in a market governed by the Cournot model in which the demand function is given by p = R$8,000 - 0.7 (q1+q2) and the cost of the product defined as R$1,700.00. The values resulting from this scenario are:
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Considering that two competing companies sell a similar product in a market governed by the Cournot model in which the demand function is given by p = R$8,000 - 0.7 (q1+q2) and the cost of the product defined as R$1,700.00. The values resulting from this scenario are:
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- Your company is going to produce two versions of its new video game systems, Boxy-x,B1, and Boxy-s,B2. Demand for each depends partly on the price of the other. The price for the Boxy-x and Boxy-s will be represented by pi and p2 respectively. The demand function for the Boxy-x is: q (p1, р2) — 140, 000 — 800р1 + 18p2 where qi is the number of Boxy-x units that will be sold per week. The demand function for the Boxy-s is: Ф (P1, р2) — 130, 000 + 18p1 — 300р2 where q2 is the number of Boxy-s units that will be sold per week. Find the prices for the Boxy-x and Boxy-s that will maximize the total revenue. (Round your answers to the nearest hundredths place.) Pi = P2 =The Able Manufacturing Company and Better Bettors, Inc. are rival firms in the production of a calculator used by horse racing fans for handicapping (determining betting strategies). Each firm has a fixed cost of $100 and a MC = $10 in producing calculators. The demand for the industry’s product is: Q = 900 – 5P, where P is the market price and Q = Q1 + Q2. If each firm must choose how many calculators to produce and sell without knowing of its rival’s production decision, what will be the Cournot equilibrium price and quantities produced? Calculate the profit for each firm.You are an online seller of a product competing in a monopolistic competition type of market. Hence, you are more of a price-taker not exactly by choice but more because of the high price elasticity of the demand for your product. The current going-rate price range in the market is between P500 and P700. Your average cost per unit of the product is P600 while your average variable cost per unit of the product is P400. If the average going-rate price goes down to P300, what should you do? Why? If the average going-rate price pegs at P500, what should you do? Why? At the current going-rate price range of between P500 and P700, what strategies will enable you to increase your own selling price to P750 without losing many customers?
- Two firms, Firm 1 and Firm 2, compete by simultaneously choosing prices. Both firms sell an identical product for which each of 100 consumers has a maximum willingness to pay of $40. Each consumer will buy at most 1 unit, and will buy it from whichever firm charges the lowest price. If both firms set the same price, they share the market equally. Costs are given by c, (q) = 16g,. Because of government regulation, firms can only choose prices which are integer numbers, and they cannot price above $40. Answer the following: a) If Firm 1 chooses p₁ = 31, Firm 2's best response is to set what price? b) If Firm 2 chooses the price determined in the previous question, Firm 1's best response is to choose what price? c) If Firm 1 chooses p; =9, Firm 2's best response is a range of prices. What is the lowest price in this range? d) Now suppose both firms are capacity-constrained: Firm 1 can produce at most 26 units, and Firm 2 can produce at most 49 units. If firms set different prices,…Two firms, Firm 1 and Firm 2, compete by simultaneously choosing prices. Both firms sell an identical product for which each of 100 consumers has a maximum willingness to pay of $40. Each consumer will buy at most 1 unit, and will buy it from whichever firm charges the lowest price. If both firms set the same price, they share the market equally. Costs are given by ci(qi) = 16q₁. Because of government regulation, firms can only choose prices which are integer numbers, and they cannot price above $40. Answer the following: a) If Firm 1 chooses p₁ = 25, Firm 2's best response is to set what price? 24 b) If Firm 2 chooses the price determined in the previous question, Firm 1's best response is to choose what price? 23 c) If Firm 1 chooses p₁ = 12, Firm 2's best response is a range of prices. What is the lowest price in this range? 16 d) Now suppose both firms are capacity-constrained: Firm 1 can produce at most 34 units, and Firm 2 can produce at most 42 units. If firms set different…Barnacle Industries was awarded a patent over 15 years ago for a unique industrial-strength cleaner that removes barnacles and other particles from the hulls of ships. Thanks to its monopoly position, Barnacle has earned more than $160 million over the past decade. Its customers—spanning the gamut from cruise lines to freighters—use the product because it reduces their fuel bills. The annual (inverse) demand function for Barnacle’s product is given by P = 400 – .0005Q, and Barnacle’s cost function is given by C(Q) = 250Q. Thanks to subsidies stemming from an energy bill passed by Congress nearly two decades ago, Barnacle does not have any fixed costs: The federal government essentially pays for the plant and capital equipment required to make this energy-saving product.Absent this subsidy, Barnacle’s fixed costs would be about $4 million annually. Knowing that the company’s patent will soon expire, Marge, Barnacle’s manager, is concerned that entrants will qualify for the subsidy,…
- Your local county's electricity is supplied by two power plants which, due to anti-collusion laws, are forbidden to communicate with each other when deciding what quantity of electricity to generate and how much to charge for it. The price of electricity in the market is given by 340 - 0.03q1 - 0.015q2, where q1 is the amount of electricity sold by generator 1 and q2 is that sold by generator 2. The cost function for generator 1 is 550 + 0.06q1 + 0.0002(q1)^2 The cost function for generator 2 is 600 + 0.04q2 + 0.0004(q2)^2 a) If the two power generators act as a Cournot duopoly, how much electricity will be produced by generator 1? b) How much power will be produced by generator 2? c) What would the market price be?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 C(Qi) = 2Qi, and the inverse market demand curve for this unique product is given by P = 110 −3 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 $100, 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 $100 as part of your profit calculation. $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 C(Qi) = 2Qi, and the inverse market demand curve for this unique product is given by P = 410 −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 $1,000, 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 $1,000 as part of your profit calculation. $.
- Barnacle Industries was awarded a patent over 15 years ago for a unique industrial-strength cleaner that removes barnacles and other particles from the hulls of ships. Thanks to its monopoly position, Barnacle has earned more than $160 million over the past decade. Its customers—spanning the gamut from cruise lines to freighters—use the product because it reduces their fuel bills. The annual (inverse) demand function for Barnacle’s product is given by P = 400 − 0.0005Q, and Barnacle’s cost function is given by C(Q) = 250Q. Thanks to subsidies stemming from an energy bill passed by Congress nearly two decades ago, Barnacle does not have any fixed costs: The federal government essentially pays for the plant and capital equipment required to make this energy-saving product. Absent this subsidy, Barnacle’s fixed costs would be about $4 million annually. Knowing that the company’s patent will soon expire, Marge, Barnacle’s manager, is concerned that entrants will qualify for the subsidy,…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…Presently, Alpha Chemical and Beta Cleaners are the only suppliers of services that clean and refurbish large holding tanks at manufacturing plants in the Northeast. No other suppliers have the equipment necessary to perform these treatments. The market inverse demand for these cleaning services is given below. P=800-80 where P is price per treatment and Q is total number of treatments per week. For simplicity, also assume that neither firm has fixed costs. From company records, you are given the following variable cost function for each firm: TVC₁ = 30 TVCg =5Q In the work that follows, you may round all your results to 2 decimal places to reduce the clutter in your answers. a. Suppose Elon Must is contemplating buying both companies and since Alpha has lower operating costs, his first thought is to shut down Beta and supply the entire market as a single plant monopoly. If he does this, what price will he charge per treatment and how many treatments will he sell each week? What…