Consider a Stackelberg duopoly with the following inverse demand function: P = 100 - 2Q1 - 2Q2. The firms' marginal cost are identical and given by MCi(Qi) = 2Qi. Based on this information the Stackelberg follower's reaction function is Group of answer choices QF = 24.5 - 0.25QL. QF = 49 - 0.25QF. QF = (50/3) - (1/3)QL. QF = 24.5 - QL.
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- Consider a Cournot duopoly with the following inverse demand function: P = 4,000 – 4Q1 - 4Q2. The firms' marginal costs are identical and are given by MC¡(Q¡) = 120QI. Based on this information, firm 1 and 2's reaction functions are Multiple Choice r1(Q2) = 485 - 0.5Q2 and r2(Q1) = 485 – 0.5Q1. r1(Q2) = 488 – 0.5Q2 and r2(Q1) = 488 – 0.5Q1. r1(Q2) = 33.3 – 0.25Q2 and r2(Q1) = 33.3 – | 0.25Q1. r1(Q2) = 288 - 0.5Q1 and r2(Q1) = 288 – %3D %3| 0.5Q2.Consider a Cournot duopoly with the following inverse demand function: P = 100 - 2Q1 - 2Q2. The firms' marginal costs are identical and are given by MCi(Qi) = 2Qi. Based on this information, firm 1 and 2's reaction functions are: A. r1(Q2) = 24.5 - 0.5Q1 and r2(Q1) = 24.5 - 0.5Q2. B. r1(Q2) = 24.5 - 0.5Q2 and r2(Q1) = 24.5 - 0.5Q1. C. Q1 = 49 - 0.5Q2 and Q2 = 49 - 0.5Q1. D. Q1 = 49 - 0.25Q2 and Q2 = 49 - 0.25Q1. Please provide me with detail step by step process to get to the answer. coz no matter how many times I tried. my answer doesnt match the one in answer keyUgly Dolls Inc. (UD) is a firm in Mytown that sells its products on a market under monopolistic competition. The cost function of UD is represented by TC = 100+10Q. Lately, because of the UD is making a big amount of profit, some firms enter the market to compete. Assume that Mytown engages in free trade in the dolls markets with Yourtown, who also faces a market with monopolistic competition. Because of this we can expect that, (a) The numbers of firms operating in this market will not change. (b) At equilibrium the profit of firms will increase. (c) The quantity of types of dolls available to consumers will increase. (d) All the above answers are correct.
- Two firms in a Cournat oligpoly each have the best response function, such that the optimal quantity for each individual firm to produce must satisfy the equation: Q-27-Q/2 What quantity Q will each firm produce in the market? Type your answer...What is the homogeneous-good duopoly Cournot equilibrium if the market demand function is Q= 1,800 - 1,000p. and each firm's marginal cost is $0.28 per unit? The Cournot-Nash equilibrium occurs where q, equals and 92 equals (Enter numenic responses using real numbers rounded to two decimai places.) Furthermore, the equilibrium occurs at a price of $ (Round your answer to the nearest penny.)Consider a duopoly, i.e., an industry with only two firms: firm A and firm B, making the same product. The industry’s inverse demand is P(Q)=320−(1/5)Q, where P is the market price and Q is the total industry output. Each firm has a marginal cost MC of $20. There are no fixed costs and no barriers to exit the market. a) Suppose that the two firms engage in Cournot competition. Find the equilibrium price PNE in the industry, the equilibrium outputs QANE and QBNE, as well as the profits πANE and πBNE, for each firm. b) Suppose the marginal cost for firm B increases from $20 to $140, while everything else remains unchanged. Find the new equilibrium price PNE in the industry, the new equilibrium outputs QANE and QBNE, as well as the new profits πANE and πBNE for each firm. c) Suppose that, in addition to the marginal cost increase from $20 to $140 from sub question b), firm B also has a fixed cost of $2500, out of which $2100 may be recouped if it shuts down; everything else remains…
- Consider a Cournot duopoly with the following inverse demand function: P = 400 − 3Q1 − 3Q2 . The firms' marginal costs are identical and are given by MCi(Qi) = 2Qi. Based on this information, firm 1 and 2's marginal revenue functions are Multiple Choice MR1(Q1,Q2) = 400 − 6Q1 − 3Q2 and MR2(Q1,Q2) = 400 − 3Q1 − 6Q2. MR1(Q1,Q2) = 200 − 6Q2 and MR2(Q1,Q2) = 200 − 3Q1. MR1(Q1,Q2) = 200 − 3Q1 − 3Q2 and MR2(Q1,Q2) = 200 − Q1 − 3Q2. MR1(Q1,Q2) = 400 − 6Q1 − 6Q2 and MR2(Q1,Q2) = 400 − 6Q1 − 6Q2.1 Consider a duopoly with firm 1 and firm 2. Their cost functions are 2q₁ and cq2, respectively, where 2 < c < 10. The market demand function is p=10-Q, where Q=q₁+9₂. (a) Assume that the two firms play the Bertrand price game. Find the firms' price choices in the Bertrand equilibrium. (b) Assume that the two firms play the Cournot quantity game. Find the firms' quantity choices in the Cournot equilibrium.Two firms, App and Sam, producing a good named Smart 13 compete in a Stackelberg duopoly. The inverse demand equation is P=25-(9,+92) the total cost function for Sam (the follower) is TC2=3q2. Determine the leader's maximum profit. The total cost function for App (the leader) is TC1 =1q1, and Moving to another question will save this response. Question 6 of 22
- SUB-SECTION B2 13 Electra and Luminux are the only two firms who provide electricity in a local market as a Cournot duopoly. The electricity provided by the two firms is identical and consumers are indifferent about which firm they will purchase electricity from. The market inverse demand for electricity is P = 100 - 2Q, where is the aggregate quantity of electricity produced by the two firms, qe qL. Electra has a marginal cost of 12, while Luminux has a marginal cost of 20. Assume that neither firm has any fixed costs. (a) Determine each firm's reaction curve and graph it. How much electricity will each firm produce in a Cournot equilib- rium? (c) What will the market price for electricity be? How much profit does each firm make? (e) Suppose now that the two firms move sequentially with one of them acting as a Stackelberg leader. Do you expect the outcome to the closer to perfect competition when Electra, or when Luminux, moves first? Explain your answer.Cournot Duopoly Suppose that Coca Cola and Pepsi companies compete in quantity sold in a small town. The market demand function for soda in the small town is given by the demand function: Q 10,000 P where Q is the aggregate quantity demanded and P is the price of a can of soda. Let Qp be the number of cans of soda sold by the Pepsi company and Qc be the number sold by the Coca Cola company. Assuming that the marginal cost of producing a can of soda is the same for both companies and equal to 50 cents, find the Nash equilibrium of the soda market in this small town. Illusrate the Nash equilibrium by using the best repsonse functions of both companies. %3DConsider a duopoly market, where two firms sell differentiated prod- ucts, which are imperfect substitutes. The market can be modelled as a static price competition game, similar to a linear city model. The two firms choose prices pi and p2 simultaneously. The derived demand functions for the two firms are: D1 (p1, P2) and D2 (p1, P2) = + 2, where S > 0 and the parameter t > 0 을 + S + P2-P1 2t 2t measures the degree of product differentiation. Both firms have constant marginal cost c > 0 for production. (a) Derive the Nash equilibrium of this game, including the prices, outputs and profits of the two firms.