For a Cournot oligopoly model with n firms facing constant marginal costs c, and market demand P = 1 - Q. where Q is the total quantity demanded in the market, the equilibrium quantity for each firm will be O (1-c)/(n+1) O (1+c)/(n+1) O (1+cn)/(n+1) O (1-cn)/(n+1)
Q: Part 3: Again consider the market for skis. a. If the price floor is $80, what is the CS, PS, TS,…
A: Price control refers to government legislation aimed at limiting or regulating the prices of goods…
Q: Use the process of comparative statics to analyse the following changes in market conditions for the…
A: Demand is defined as the willingness of a consumer to buy something, whereas supply is the total…
Q: Quantity What is the amount of producer surplus after the governa
A: Equilibrium in the market occurs at the intersection of market demand and market supply curve. The…
Q: Referring to the concept of an "invisible hand" allocating resources across industries in response…
A: The concept of the "invisible hand" is a central idea in economics that was first introduced by Adam…
Q: Assume a two-sector economy model is given by: Y = C + I, C = 97 + 0.7Y, I = 180 –…
A: “Since you have posted multiple questions, we will provide the solution only to the specified…
Q: Question 4 is the benefit that customers receive from a good or service when others also are using…
A: Benefit reffers to the advantage or usefullness comes from by using a service or a product. It is…
Q: Say that the bundle of goods purchased by a typical consumer in the base year consisted of 20…
A: A price index is a statistic that compares a specific period's average price of a basket of goods…
Q: Select all the items which would be counted in US GDP 2015 from the list below: Select all the…
A: Gross domestic product refers to the total market value of goods and services produced domestically…
Q: Your sister’s utility function over the 2 goods X and Y is defined by: U (X,Y) = XY +4Y a. If…
A: The utility function is the mathematical depiction of the welfare or satisfaction derived from the…
Q: Labor (workers/day) Output (units/day) Total fixed cost ($/day) Total variable cost ($/day) Total…
A: Total cost is the sum of fixed cost and variable cost. Fixed cost are the cost that is fixed and…
Q: Assume the following utility functions: U₁= x2/3 and U₂ = x 1. What is the marginal utility of both…
A: Utility function and marginal utility: The utility function refers to all those commodity bundles…
Q: Your company has just signed a three-year nonrenewable contract with the city of New Orleans for…
A: EUAC refers to the discounted annual worth of a future cash flow .
Q: A company wants to issue a coupon for a product. The marginal cost of the product is $1. If the…
A: Lerner index states the relationship among profit-maximizing price, marginal cost, and elasticity of…
Q: what is Mexico Governance and Aid?
A: Since Mexico is a federal presidential representative democratic republic, president also serves as…
Q: Which normal form game best represents split or steal? (Careful, these are very similar - check that…
A: In game theory, a normal form game, also known as a strategic form game, is a mathematical…
Q: A monopolist has estimated that IF he enters an industry, he will have fixed costs of $600 and…
A: Incase of monopoly, There exists a single seller. The demand curve faces by the monopolist is…
Q: give a suppl fuction s(q)=q^(2)+2q and demand function D(q)=1672-4q where q reprsents the quantty of…
A: Demand Function : D(q) : P=1672-4q Supply Function : S(q) : P=q2+2q Equilibrium is a market state…
Q: Banks in New Transylvania have a desired reserve ratio of 10 percent of deposits and no excess…
A: The financial services sector known as banking includes institutions that accept deposits, lend…
Q: Suppose that the price of a ride is $12. Then Angela buys 8 rides a month. Suppose her demand curve…
A: Consumer Surplus is the measure of the difference between the highest price a consumer is willing to…
Q: Give typing answer with explanation and conclusion Which products are most likely to be most price…
A: Price elasticity of demand measures the percentage change in quantity demanded of a good or service…
Q: Assuming that the price of an ice cream sandwich is $4, then Jason's income is Jason's preferences…
A: A budget constraint illustrates the combination of two goods that can be purchased by consumer,…
Q: Find an illustration or graph that identifies the different phases of the business cycle. Thereafter…
A: The business cycle refers to the natural rise and fall of economic activity over time. It typically…
Q: Make diagrams to support your answer. Beginning in 2022 central banks worldwide began to respond to…
A: Introduction Banks will raise rates of interest to motivate consumers to spend fewer dollars and…
Q: 1. What is CPI? How to calculated CPI? How to find out inflation based on CPI. = Year Year 1 Year 2…
A: CPI is the consumer price index. CPI includes the goods and services consumed by a typical…
Q: 5. The following diagram displays isoquants for different combinations of labor and capital. To…
A: A constant rate of return refers to a steady and unchanging rate of profit or interest earned on an…
Q: Give typing answer with explanation and conclusion Which of the following illustrates goods…
A: goods market The market for physical commodities, such as food, clothing, and technology, is…
Q: 7. Short-run and long-run effects of a shift in demand Suppose that the jackfruit industry is…
A: Given information: Suppose that the jackfruit industry is initially operating in long-run…
Q: Colombia is the world’s biggest producer of roses. The global demand for roses increases and at the…
A: Exchange rate: The value of one currency in another currency's terms is known as the nominal…
Q: This week Sara’s income falls from $12 to $9 a week, while the price of popcorn is unchanged at $3 a…
A: The premise behind consumer choice is that customers would make reasonable selections to meet their…
Q: Only typed answer over the last 50 years, in the united states the labor force participation rate…
A: Labour force participation refers to the percentage of working age population that is in the labor…
Q: Next, we want to understand some of the mechanisms that can shape the behaviour of negotiators at…
A: With "Polluting technology" the profit of the firm is = $11 With "Clean Technology" the expected…
Q: Decision Alternative Up S₁ Stable s2 Down S3 Investment A, d₁ Investment B, d₂ Investment C, d3…
A: The expected utility approach is a decision-making method that involves calculating the expected…
Q: 1) What are the Nash equilibria? Which one is unreasonable/non-credible threat?
A: Disclaimer- “Since you have asked multiple question, we will solve the first question for you as per…
Q: Assume that in the base year (2008), a country's nominal GDP is 10,000 billion dollars. The country…
A: Gross domestic product (GDP) measures the market value of final goods and services produced under a…
Q: Calculate Madison's marginal revenue and marginal cost for the first seven cardigans they produce,…
A: Profit maximizing quantity is computed where MR=MC or the profit is maximum. For the price given:…
Q: Consider an economy with two types of firms, S and I. S firms all move together. I firms move…
A: * SOLUTION :- Based on the above information the calculation is given below
Q: What is the first item to identify when determining the short-run equilibrium for a monopolistically…
A: In a monopolistic competitive market, there are many firms with free entry and exit. Firms sell…
Q: Consider the Economist article: "Wild Horses" April 20th 2011…
A: An economic challenge is a circumstance or problem that prevents an economy from operating,…
Q: This week Sara’s income falls from $12 to $9 a week, while the price of popcorn is unchanged at $3 a…
A: Relative price is the price of one good measures in terms of other good. Real income is calculated…
Q: anks in New Transylvania have a desired reserve ratio of 10 percent of deposits and no excess…
A: The financial services sector known as banking includes organizations that take deposits, lend…
Q: A company wants to issue a coupon for a product. The marginal cost of the product is $1. If the…
A: Given information: A company wants to issue a coupon for a product. The marginal cost of the product…
Q: Graphs and Charts Cass and Kyon visualize data in many different ways, but the graphs or charts they…
A: An economics graph is a visual illustration of numerical data in economics. It helps economists for…
Q: Suppose, the demand and supply curve in a US manufacturing firm are provided as follows: ES = 20 +…
A: The labor demand and supply in the US manufacturing firm: ES = 20 + 2w -------------> Labor…
Q: The following events have occurred at times in the history of the United States 1. The world economy…
A: The aggregate demand is a sum of private investment demand, government expenditure, private…
Q: We would like you to identify a financial market and describe it using an economic approach.…
A: A financial market is an exchange where buyers and sellers trade financial instruments such…
Q: Option A) you receive $10,000 today Option B) you receive $20,000 10 years from today If the…
A: Present value is the value of investment in today's dollar. Future value is the value of investment…
Q: oyment status is given in the following table. d on the criteria used by the Bureau of Labor…
A: Defining Employment and Unemployment The Bureau of Labor Statistics (BLS) sets the criteria for…
Q: Egypt authorities faced significant health and economic policy challenges during the COVID19…
A: (i) A fall in confidence can lead to a decrease in consumption and investment expenditure. Consumers…
Q: The figure below shows the market for a good. An improvement in EQ would shift the supply curve for…
A: An externality is an economic concept that refers to the impact of an economic activity or…
Q: Describe the four fundamental principles of integrative negotiation.
A: Integrative negotiation is a strategy in economics that aims to create a "win-win" outcome for all…
Step by step
Solved in 2 steps
How does it go from qi = (1 - q1 - q2 - ... - qn - c)/2 to q = (1 - cq)/(n + 1) via the substitution in the last step?
by Bartleby Expert
- In a Cournot duopoly model, the market demand curve is given by P 100 - yI - y2- !! where y, is the amount of output firm 1 produces and y2 is firm 2's level of output. The cost function of firm 1 is c(y1) 75 +8y1. The cost function of firm 2 is c(y2) = 100 +12y2. %3D The reaction function of firm 1 is y1 = -0.5y2- The reaction function of firm 2 is y2 = -0.5y1- In the Cournot equilibrium, firm 2 produces units of output and makes a producer surplus of $Consider a Cournot oligopoly with n = 2 firms. Firm 1 cost function is TC₁ (9₁) = 20 + 12q₁ + q², while firm 2 cost function is TC₂ (9₂) = 50 +8q2 + q2 . The total market demand is P(Q) = 50 — 2Q, where Q is the total quantity produced by all (active) firms in the industry. a- Compute the Cournot equilibrium total quantity, price, quantity for each firm, and profit for each firm. Which firm is making higher profits? b- Consider the situation in which a third firm (firm 3) enters the market. What is the total equilibrium quantity, price, quantity and profit for each firm if TC3 = TC₁? [hint: q₁ and q3 will be the same, since 1 and 3 are identical] c- How would your answer at point b change if instead TC3 = TC₂? Would consumers prefer firm 3 to enter with the total cost of firm 1 or firm 2? d- What would be the highest one-time cost that firm 3 would be willing to pay to enter the market and then compete in a Cournot game with total cost equal to firm 1?Two competing firms produce homogenous products. They also have the iden- tical total cost function: if a firm i produces quantity q, then its total cost is C, (4.) = 2q«- If the two firms compete in quantities (Cournot model of duopoly), then the market demand is P (g1, 2) = 60 – q1 - 2. If the two firms compete in prices (Bertrand model of duopoly) and firm i chooses price then the demand for firm i is P.. 60-P if p, is lower than the competitor's price if p, is higher than the competitor's price if p, is equal to the competitor's price Now consider two scenarios: A. The two firms are two law firms. One unit of product = one hour of labour. B. The two firms are two avocado farms. One unit of product = one ton of avocados. For each of these two scenarios, answer the following questions: (a) Should we use the Cournot model or the Bertrand model to study the firms' compe- tition? (b) Use your model of choice to predict each firm's profit level in equilibrium. (c) If the two firms…
- If firm 1 and firm 2 are the oligopolistic firms in bottled spring water production in Nomansland. The market demand is given by ? = 5000 −20?, Qd is the number of kilolitres demanded per month while P is the price of kilolitres of bottled water. The marginal cost of a kilolitre of bottled water is R10.How do I Find the Cournot equilibrium quantities and price? and how do I Find the Cournot profits and the monopolist profits?For a Cournot oligopoly model with n firms facing constant marginal costs c, and market demand P = 1 - Q, where Q is the total quantity demanded in the market. If the n firms collude successfully, then the equilibrium quantity for each firm will be O (1-c)/2n O (1-c)/n O (1+c)/2n O (1+c)/nSuppose oil production in the Gulf of Mexico was a symmetric horizontal oligopoly in Cournot competition. Assume there are two producers, each with a constant marginal cost of production of $50 per barrel. Let the demand function for oil in the region be D(p) = 12000 – 20p, where demand is measured in barrels per day. (You will need to calculate inverse demand from demand before moving on). What would the perfectly competitive equilibrium price and quantity be? What would be the consumer surplus and producer surplus? Draw each firm’s residual inverse demand curve. Calculate the Cournot-Nash equilibrium price and quantity. What is the total consumer surplus, total producer surplus across the two firms, and deadweight loss?
- 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.)4. Consider a Cournot Oligopoly with two firms, where firm 1 is twice as efficient as firm 2. In particular, firm l's cost function is c1(q1) = q1, while firm 2's cost function is e2(q2) = 2q2. The inverse market demand function is given by P = 100 – 5(q1 +92). (a) Find the firms' reaction (best response) functions. (b) Find the firms' equilibrium output levels and their profits. Does firm 1 make twice the profit of firm 2?You are given the market demand function Q= 2200 – 1000p, and that each duopoly firm's marginal cost is $0.07 per unit, which implies the cost function: C(at) = 0.07i, assuming no fixed costs for i = 1, 2. The Cournot equilibrium quantities are q1 = and q2 = (enter your responses as whole numbers). The Cournot equilibrium price is $ (round to the nearest penny). Calculate the Cournot profits: firm 1 $ and firm 2 $ (round both responses to the nearest cent).
- Walmart (firm 1) and Amazon (firm 2) are a duopoly in the grocery market. They are faced with an inverse demand of P(Q1, Q2) = 16−2 (Q1+Q2) and total costs of TC(Qi) = 2Q2i, i= 1,2. Note that the marginal cost is not constant! 1. Obtain the Cournot equilibrium quantities and profits. 2. Obtain the Stackelberg equilibrium in which Walmart moves first. Compare with the Cournotequilibrium. 3. Obtain the cartel outcome (= shared monopoly). Compare with Stackelberg and Cournot.QUESTION 12 Consider an industry with two identical firms (denoted firm 1 and 2) producing a homogenous good. Firms compete in quantities and have a constant marginal cost of 30. Demand in the industry is given by D(p) = 195 - p/2. Let q1 and q2 denote the quantities of firm 1 and 2, respectively. Derive the best resonse functions and the Nash equilibrium in quantities. Which of the following statements are correct? [There may be more than one correct statement.] The Nash equilibrium quantity for each firm is 40. O The Nash equilibrium quantity for each firm is 60. The reaction function of firm 1 is given by q1 = 60 - (92)/2. The reaction function of firm 1 is given by q1 = 45 - (92)/2. The reaction function of firm 1 is given by q1 = 90 - (92)/2. O The Nash equilibrium quantity for each firm is 30. None of the above. 000Suppose we have a duopoly with Firm 1 and Firm 2 and the following inverse demand function:P = 100 – 5(Q1 + Q2)Total Cost and Marginal Cost values for firms 1 and 2 are:TC1 = 20Q1TC2 = 30Q2MC1 = 20MC2 = 30Assuming a Cournot Duopoly, the following response functions are derived:Firm 1: Q1 = 8 – 0.5Q2Firm 2: Q2 = 7 – 0.5Q1Using this information, calculate the quantity produced for each firm, the price, and profits foreach firm and the market as a whole.
