Two firms produce and sell differentiated products that are substitutes for each other. Their demand curves are Firm 1: Q₁ = 40-3P₁+ P2 Firm 2: Q₂ = 40-3P 2+ P₁ Both firms have constant marginal costs of $2.30 per unit. Both firms set their own price and take their competitor's price as fixed. Use the Nash equilibrium concept to determine the equilibrium set of prices. In um noch firm will produce unito of output (50 d to tuo donimo
Q: If the economy is producing in the intermediate zone of the ad/as would you suggest discretionary or…
A: Government of the country take help of fiscal policy measures to maintain balance in the economy.
Q: Suppose that the market for black sweaters is a competitive market. The following graph shows the…
A: Answer: According to the above figure if the market price is $15 the equilibrium occurs at point E.…
Q: A firm will be better off by hiring an additional worker only when: O The overall benefit is greater…
A: Profit maximisation is the ultimate goal of firms operating in the market. Hiring decisions depend…
Q: According to the following given information how to determine: Production 1 2 3 4 5 6 7 8 9 10 11 12…
A: Introduction We have given data of a product Z. Product Z has produced 1 to 15 months as units of…
Q: Use the AS/AD diagram to show( graphically only) the short term and long term effects of restrictive…
A: Restrictive fiscal policy leads to the fall in the AD and recessionary pressure rises up in the…
Q: In a time of crisis where there is a pandemic, policymakers try to encourage economic activity by…
A: The use of government spending and tax strategies to impact economic conditions, particularly…
Q: rage fixed costs would rise, but marginal costs would fall. rage fixed costs and average total costs…
A: The average fixed cost (AFC) is the fixed cost that constant with the change in the number of goods…
Q: The organization responsible for conducting monetary policy and ensuring that a nation's financial…
A: Monetary policy is the policy of the Monetary Authority of the country that aims to control the…
Q: You want to buy a new machine. It's going to cost $200,000 and have a salvage value of $15,0 after 7…
A: Let us assume the annual revenue which would provide 12% return be 'x' . If we discount the net…
Q: 8 Depict on graph and briefly explain effects of import tariff (economic consequences for the…
A: Deadweight loss is the net welfare loss experienced by society.
Q: Question #5: a. You have 2 investment choices. The Warlight machine costs $10,000 and has a salvage…
A: Given information 2 Machines: Warlight Machine and Bridgedale machine Cash flow table MARR=18%
Q: A city is evaluating the installation of a garbage incinerator on the outskirts of town. The cost of…
A: Given information: The cost of unit = $3 million Operating expenses = $30000 Remediation expenses =…
Q: Zhao Co. has fixed costs of $378,200. Its single product sells for $179 per units, and variable…
A: Variable prices change primarily based totally on the quantity of output produced. Variable prices…
Q: The average price of milk per gallon was $1.85 in 1980 and $4.53 in 2017. The consumer price index…
A: "Consumer price index depicts an overall change in price levels over time on the basis of a…
Q: Use the following data to answer the question below. Malaysia data: The annual growth rate of…
A: The ratio of aggregate output (e.g., GDP) to aggregate inputs is widely used to estimate total…
Q: The table shows statistics for three Canadian cities at several different points in time. What was…
A: Unemployment rate is the ratio of unemployed people to the labor force. Given: Labor force in…
Q: Explain the following terms: The Lucas Critique; and why the traditional Phillips cure is regarded…
A: Phillips Curve:- A. W. Phillips devised this curve, which states that inflation and joblessness have…
Q: A monopolist has the following production function Q-L050s where Lis the number of units of labour…
A: Here we have:- Market demand=P=24-Q and Q=L0.5K0.5w(wage rate)=$4r(rental rate of capital)=$16 Total…
Q: Differentiate, whenever possible, the items bought Purchase products at the highest cost Accomplish…
A: For a businessman organisation, minimising costs is the main challenge that it has to overcome.
Q: 22
A: Answer: Given, Demand function:P=100-0.5QWhere, Q=q1+q2Cost functions:C1=20q1C2=0.25q22 Let us first…
Q: Given the following data R = $1/¥105 F = $1/¥140 i(u.s.) = 10% What is the interest rates in Japan…
A: The value of one country's currency in relation to the currency of another country or economic zone…
Q: How does the ability to discriminate correctly affect his or her earnings?
A: The law of supply and demand governs how much a product costs. In a perfect or free market,…
Q: Imagine that you wish to launch a start-up online business. You do not have enough capital…
A: Islamic banks are based on Islamic laws which imply principles of Islamic finance and banking have…
Q: Please do the both questions I will be give you Upvote 3: If a country increases its money supply…
A: Note:- Since we can only answer one question at a time, we'll answer the first one. Please repost…
Q: When a portfolio has a known future date for a particular outlay to occur, it is most likely that…
A: Target date vaccination is a popular way to use duration to hedge risk in a bond portfolio's future…
Q: Now go back to original demand and supply. Suppose a price ceiling P=$70 is imposed. Wh Producer…
A: Producer surplus refers to the area below the price and above the supply curve. Deadweight loss…
Q: Figure 4.1 illustrates the demand and supply schedules for pocket calculators in Mexico, a "small"…
A: In the figure, it is given that the world price is $ 3. The country will import the good because…
Q: for producers to to pro why? Explain f. e. What will happen to total surplus in the market if 110…
A: A equilibrium is the point where firm maximise the profit and produce efficient level of production…
Q: What does Foreign Exchange mean? Why do we see currency fluctuations?
A: Foreign exchange is term used in the international economics. The term related to currency exchange…
Q: a) Complete the table below considering that the GDP of Ireland (at 2005 market prices) grew from 79…
A: Note: We will answer the first question as the exact one was not specified. Please resubmit a new…
Q: carlos invests $6000 in a 24 month CD that has a 4.75 interest rate. use the formula to find how…
A: Certificate of Deposit (CD) The investors and the authorised banking and financial institution sign…
Q: To facilitate balanced growth of trade and to contribute, thereby to the promotion and maintain high…
A: The International Monetary Fund is an organisation of 190 countries that works to foster global…
Q: The concept of markup under monopolistic competition would best be described as the a. attempt of…
A: Monopolistic competition is a kind of market structure in which there are several numbers of…
Q: J 7 What is the ordinary simple interest on 7000 for 8 mos and 15 days if the rate of interest is…
A:
Q: 15. Cheques, Demand Drafts are example of question 15 options: Fiat Money Fiduciary…
A: Market analysts separate among three unique sorts of money: commodity money, fiat money, and bank…
Q: Kevin invests $5000 at an APR of 5.6% compounded monthly. Carl invests $4800 at an APR of 6.2%…
A: Given values: The investment amount of Kevin = $5000 The investment amount of Carl = $4800
Q: Revenue and cost (dollars per unit) $20 11 10 6 d MC ATC AVC b 0 200 250 300 At the profit…
A: Here, the given graph shows the the revenue and cost curves of a firm to explain the market…
Q: The Economics Student Club has $30 to spend on pizza and pop at each of its meetings. If pizza costs…
A: The total number of products that can afford within the present budget is referred to as a budget…
Q: The following function relates price to quantity demanded: price = 100 - 3q And note that when price…
A: Price elasticity of demand is a measurement of how a product's demand changes in response to price…
Q: If Australia has a current account deficit, then: Select one: O a. both B and C apply. O b. we must…
A: A current account is an account that records all of the transactions that occur in relation to the…
Q: H10. A website offers a place for people to buy and sell emeralds, but information about emeralds…
A: Demand and Supply The convergence of supply and demand determines the price & quantity of a…
Q: A musical Disc is being produced by a music recording studio, and the company estimates that it will…
A: Answer: Given, Fixed cost (FC)=$100,000Variable cost per unit (VC)=$6.75 per unitPrice of disc…
Q: Why should America help support countries with weaker economies in hard times? Consider how the…
A: A social activity begun by such a huge economy will be to assist and support lesser economies.All of…
Q: (A). In the 1970s when the Bank of England used monetary policy to trade off higher inflation for…
A: "Since you have asked multiple questions, we will solve first question for you .. If you want any…
Q: Sandra has a short-run cost function of producing good 1 of c(q) = 4q2 + 40, where q is the quantity…
A:
Q: Suppose Mika has budget of $600 for only two goods, x and y. The price of a Good X is $10 and the…
A: The ability of a good to fulfill human needs is demonstrated by its utility. The utility function…
Q: NX-500-500e r=r*=5 Suppose the world interest rate drop from r=5 to 2percent (assume government…
A: The exchange rate at which the demand for a currency and supply of the same currency are equal. The…
Q: Use the following data to answer the question below. Malaysia data: The annual growth rate of…
A: Production function with total factor productivity, labor’s share and capital’s share of income is…
Q: 2
A: Olivia is consuming in two periods, in period she is borrower, that means C1 is more than the M1.
Q: 4. What is the optimal income distribution between two citizens under these three assumptions: -The…
A: Income dispersion is the perfection or correspondence with which pay is managed out among…
Step by step
Solved in 5 steps
- Two firms produce and sell differentiated products that are substitutes for each other. Their demand curves are Firm 1: Q₁ = 40-3P₁+ P2 1 Firm 2: Q₂ = 40 -3P 2+P1 Both firms have constant marginal costs of $4.70 per unit. Both firms set their own price and take their competitor's price as fixed. Use the Nash equilibrium concept to determine the equilibrium set of prices. Since the firms are identical, they will set the same prices and produce the same quantities. In equilibrium, each firm will charge a price of $ and produce units of output. (Enter your responses rounded to two decimal places.) Each firm will earn a profit of $ (Enter your response rounded to two decimal places.)Two firms produce and sell differentiated products that are substitutes for each other. Their demand curves are Firm 1: Q, = 40 - 3P,+ P2 Firm 2: Q, = 40 - 3P2+ P, Both firms have constant marginal costs of $3.10 per unit. Both firms set their own price and take their competitor's price as fixed. Use the Nash equilibrium concept to determine the equilibrium set of prices. Since the firms are identical, they will set the same prices and produce the same quantities. In equilibrium, each firm will charge a price of $ and produce units of output. (Enter your responses rounded to two decimal places.)QUESTION 10 Suppose there are two firms that produce an identical product. The demand curve for the product is given by P = 62 - Q where Q is the total quantity produced by the two firms. Both firms choose their individual quantities qı20 and q22 0 simultaneously. Each firm has a marginal cost of 37. What is the market price when both firms produce the quantities in the unique Nash equilibrium? Give your answer as a number to two decimal places.
- Consider a market for crude oil production. There are two firms in the market. The marginal cost of firm 1 is 20, while that of firm 2 is 20. The marginal cost is assumed to be constant. The inverse demand for crude oil is P(Q)=200-Q, where Q is the total production in the market. These two firms are engaging in Cournot competition. Find the production quantity of firm 1 in Nash equilibrium. If necessary, round off two decimal places and answer up to one decimal place.Jane and Sara are competing orange juice salespersons in Amherst. Their stands are next to each other on a street and consumers regard them as identical. The marginal cost of an orange juice is $1. The demand for orange juice every hour is Q = 20 − P where P is the lowest price between the two salespersons. If their prices are equal they split demand equally. a. If they set prices simultaneously (prices can be any real number), what is the Nash equilibrium price? b. If, against what we have assumed in class, orange juice salespersons have to charge prices in whole dollars ($1, $2, $3, etc), what are the Nash equilibrium prices? c. Assuming whole dollar pricing, if Jane sets her price before Sara, what price would she charge? Answer all 3 partsTwo firms operating in the same market must decide between charging a high price or a low price. The Payoffs are as below. Firm A's profit is listed before the comma, B's profit after the comma. Firm B Firm A Low Price High Price Low Price 16, 17 7, 28 High Price 28, 7 22, 22 If each firm tries to choose a price that is optimal, regardless of the other firm's price, what is the Nash equilibrium? Does either firm have a dominant strategy?
- Consider two firms that produce the same good and competesetting quantities. The firms face a linear demand curve given by P(Q) =1 − Q, where the Q is the total quantity offered by the firms. The costfunction for each of the firms is c(qi) = cqi, where 0 < c < 1 and qiis the quantity offered by the firm i = 1, 2. Find the Nash equilibriumoutput choices of the firms, as well as the total output and the price, andcalculate the output and the welfare loss compared to the competitiveoutcome. How would the answer change if the firms compete settingprices? What can we conclude about the relationship between competitionand the number of firms?The New York Times reports that Wal-Mart has decided to challenge Netflix and enter the online DVD-by-mail market. Because of economies of scale, Wal-Mart has a slight cost advantage relative to Netflix. Wal-Mart is considering the use of a limit pricing strategy. It can enter the market by matching Netflix on price. If it does, and Netflix maintains its price, then both firms would earn $5 million. But if Netflix drops its price in response, Wal-Mart would have to follow and would earn $2 million; Netflix would earn $3 million. Or Wal-Mart could enter the market with a price that is below Netflix's current price but above its marginal cost. If it does, Netflix would make one of two moves. It could reduce its price to below that of Wal-Mart. If it does, Wal-Mart will earn a profit of $0, and Netflix will earn a profit of $2 mil- lion. Or Netflix could keep its present price. If Netflix keeps its present price, Wal-Mart can keep its present price and earn $6 million (while Netflix earns…The market demand function is Each firm has a marginal cost of m = $0.28. Firm 1, the leader, acts before Firm 2, the follower. Solve for the Stackelberg-Nash equilibrium quantities, prices, and profits. The Stackelberg-Nash equilibrium quantities are The Stackelberg-Nash equilibrium price is Profits for the firms are and 92 p = $ π2 $ = Q=7,000 1,000p. 91 and units units. (Enter your responses as whole numbers.) (Enter your response rounded to two decimal places.) π₁ = $ (Enter your responses rounded to two decimal places.)
- 1. The market (inverse) demand function for a homogeneous good is P(Q) = 10 - Q. There are two firms: firm 1 has a constant marginal cost of 2 for producing each unit of the good, and firm 2 has a constant marginal cost of 1. The two firms compete by setting their quantities of production, and the price of the good is determined by the market demand function given the total quantity. a. Calculate the Nash equilibrium in this game and the corresponding market price when firms simultaneously choose quantities. b. Now suppose firml moves earlier than firm 2 and firm 2 observes firm 1 quantity choice before choosing its quantity find optimal choices of firm 1 and firm 2.Using a payoff matrix to determine the equilibrium outcome Suppose there are only two firms that sell smart phones, Flashfone and Pictech. The following payoff matrix shows the profit (in millions of dollars) each company will earn, depending on whether it sets a high or low price for its phones. Pictech Pricing High Low Flashfone Pricing High 11, 11 2, 18 Low 18, 2 10, 10 For example, the lower, left cell shows that if Flashfone prices low and Pictech prices high, Flashfone will earn a profit of $18 million and Pictech will earn a profit of $2 million. Assume this is a simultaneous game and that Flashfone and Pictech are both profit-maximizing firms. If Flashfone prices high, Pictech will make more profit if it chooses a ______ price, and if Flashfone prices low, Pictech will make more profit if it chooses a _____ price. If Pictech prices high, Flashfone will make more profit if it chooses a _____ price, and if Pictech prices low, Flashfone will make more…Two countries produce oil. The per unit production cost of Country 1 is C1 = $2 and of country 2 it is C2 = $4. The total demand for oil is Q = 40-p where p is the market price of a unit of oil. Each country can only produce either 5 units, 10 units or 15 units. The total production of the two countries in a Nash equilibrium is 10 15 20 25 30