Question 1. Firm 1 and Firm 2 are the only two firms in a market where price is determined by the inverse demand function: P = 139 - Q. Q is the sum of Firm 1 and Firm 2's output, so Q = 91 +92 Firm 1's total cost function is given by TC₁(91) = 10q1 Firm 2's total cost function is given by TC₂(92) = 992 If these firms Cournot compete (simultaneously setting quantities), what will market price be when both firms are maximizing profits in equilibrium? (Note: The answer may not be a whole number, so round to the nearest hundredth) (Note: The numbers may change between questions, so read carefully)
Q: Suppose the demand for a product is given by P = 30-3Q. Also, the supply is given by P = 10 + Q. If…
A: Given Demand equation for a product: P=30-3Q .... (1) Supply equation for the product:…
Q: Suppose a firm faces a short-run total cost function of SRTC = 20 + 3Q + 2Q2 . a) Write the firm’s…
A:
Q: Refer to the accompanying table below. The marginal benefit of the 5th unit of activity is: Units of…
A: A marginal benefit is a most extreme sum a customer will pay for an extra decent or administration.…
Q: How important is International Trade for the country of Estonia??
A: Economists such as Adam Smith and David Ricardo understood the importance of international…
Q: Exhibit: Demand and Price Elasticity 2 Price 58 is price inelastic s price elastic has a slope of…
A:
Q: What actions and policies can be implemented by a policy advisor of national government in order to…
A: Meaning of Managerial Economics: The term managerial economics refers to the scenario of…
Q: Which statement is correct? Select one: O a. The Gini coefficient ranks the U.S. 4th highest in…
A: Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: Do you think a tutoring business sells a relatively elastic or inelastic product/service? Mention…
A: Elasticity is a term used in economics to describe how a good or service's total quantity demanded…
Q: own experiences to describe when you were part of a transaction that resulted in a positive…
A: Externality refers to the activity done by an individual that may result in cause to society but not…
Q: In our depiction of the money market, the money supply is controlled by which of the following?…
A: The entire amount of money that is at any given time money in circulation is known as the money…
Q: Should countries in financial distress be permitted to install temporary tariff and nontariff…
A: Non-levy hindrances to exchange are exchange boundaries that limit imports or products of labor and…
Q: 1. Wages of bus drivers increase. At the same time, incomes of consumers generally increase. How…
A: According to the question, it is given that : Wages of bus drivers rises. At the same time, incomes…
Q: the same project, all with different durations. B. The critical path is the one with the most…
A: *Answer: *a False: The project path with maximum duration is the Critical path. If paths are…
Q: The Federal Reserve wants to increase the money supply by increasing the lending potential of…
A: The Federal Reserve is the central bank of the US that controls and manages the money supply in the…
Q: Multiple Choice and curve Will shift to the left as a result of: a decrease in business taxes.…
A: The rate of interest affects the investment demand curve. The investment is inversely related to the…
Q: Suppose the demand function of a product is given by q = 14-5/p.1 1, the demand is elastic, and the…
A: Demand function : q = 14 - 5p31<p<10 p = 8
Q: There are two cities located in Canada. One is called Vancouver and the other is Toronto. Assume…
A: Urban development in Canada in this period zeroed in on Montreal and Toronto, which were the two…
Q: production function model in which firm output in a particular industry depends on the amount of…
A: Linear Regression refers to the statistical analysis that statisticians use to predict the value of…
Q: Economics Complete the following table by selecting the redistributive philosophy that matches each…
A: Libertarianism:- A political theory known as libertarianism emphasizes independence as a fundamental…
Q: Demand is relative less elastic under which of the following situations? O a. Shorter time frame…
A: There are various factors that can affect the demand elasticity of a good such as availability of…
Q: Short-range forecasts tend to ________ longer-range forecasts. A. deal with more comprehensive…
A: Forecasts for the short term are made using data that has been seen, extrapolated, and how systems…
Q: The economy of Fantasia produces only 2 goods namely Shoes and Computers. The total production and…
A: Given values: Price of shoes in 2019 = 110Quantity of shoes in 2019 = 3500Price of computer in 2019…
Q: n a particular industry, labor supply is ES = 10 + w and labor demand is ED = 40 - 4w, where E is…
A: Given the supply function of labour, Es = 10 + w The demand function of labour, Ed = 40 - 4w
Q: PART D) Risks and Benefits of CBDCS • Some perspective of political economy would be helpful. • What…
A: A CBDC is another type of outside cash intended to supplant actual currency at last. Since it is an…
Q: A steel company is trying to decide between two industrial type cranes. Crane A and Crane B are…
A: In the present worth method, we find the present values of all the cash flows.
Q: Which of the following accurately describes the phenomenon of crowding out? government…
A: Aggregate demand is composed of consumption spending, investment spending, government purchases and…
Q: A monopolist can produce at a constant average (and marginal) cost of AC = MC = $5. It faces a…
A: Given the marginal cost = $5 Average cost = $5 Demand curve, Q = 53 - P
Q: arold's MPC is .70. Harold has just received a birthday card with $100 inside. How much will Harold…
A: Marginal propensity to consume (MPC) measures the change in consumption due to change in income.…
Q: Eng. Eco. Q1 Gamma Associates has the following details: Fixed cost = Rs. 20,00,000 Variable cost…
A: Given informations: The fixed cost of the Gamma associates = 2000000 Variable cost = 100 Selling…
Q: Education benefits society as a whole. That is why, among other things, studies at colleges and…
A: Subsidies A benefit supplied to a person, company, or institution is known as a subsidy, and it is…
Q: Why have intellectual property rights (IPRs) become a major issue in recent rounds of international…
A: The rights that people are granted over their creative works are known as intellectual property…
Q: In this chapter we discussed the policy decisions that central banks can make to return an economy…
A: Economic equilibrium is a condition where market influences are adjusted, an idea acquired from…
Q: nputers is -.90, and the elasticity of computers for both purposes is 1. er-unit tax of $200 is…
A: A deadweight loss is an expense for society made by market shortcoming, which happens when market…
Q: Eng. Eco. Q1 Gamma Associates has the following details: Fixed cost = Rs. 20,00,000 Variable cost…
A: Given information: Fixed cost = Rs 2000000 Variable cost per unit = Rs 100 Selling price per unit =…
Q: What is the cross rate between Taiwan Dollar (TWD) and the Denmark Krone (DMK) if the following…
A: A cross rate is a foreign currency trade exchange between two monetary standards that are both…
Q: What is supplied
A: Demand is the quantity of an item or service that consumers buy at various prices during a specific…
Q: a) Illustrate the consumption choice for an individual when two goods are considered "perfect…
A: Substitutes are those goods which can be used at one's place to satisfy a need or want. They are…
Q: You are a senior management position in a leading international funds management firm. Your Board of…
A: Markets refer to the place or platform that exists for the purpose of economic transactions. It…
Q: Two companies, Klaren Electronics, a monopoly, and the Yarn Barn, a perfectly competitive firm, are…
A: Monopoly Market: The monopoly market is the market where a single seller or firm dominates the…
Q: Which of the following is NOT a function of the Federal Reserve? Multiple Choice O Lender of Last…
A: When talking about the Federal Reserve, it is the Central banking authority in the United States.
Q: Why do some firms practice price discrimination? Relate your answer to the common practice of public…
A: A pricing technique known as price discrimination is when companies sell the same goods or services…
Q: A firm is in a perfectly competitive industry where the market price for its product is $32 The…
A: Given: Total Cost = 1225+25Q+0.01Q2 Price of Product =$32
Q: Use the information from the previous table to fill in the following table. Hint: You will need to…
A: The quantity of all goods and services produced is multiplied by their prices, and the resulting sum…
Q: Consider an economy described by the following: a. Derive expressions for the MP curve and the AD…
A:
Q: Question 1. Provide a brief description of Globalization and indicate three (3) ways that…
A: Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: If compounded monthly, a loan will be amounting to ₱132,400 if invested at 11.5%interest for 1.75…
A: given that, amounting = ₱132,400 11.5%interest for 1.75 years, time(n) = 12
Q: Eng eco. Q2 Consider the following data of a company for the year 1997: Sales = Rs. 1,20,000 Fixed…
A: Fixed Cost: It is the cost that remains constant at every level of output which means it does not…
Q: The pattern of FDI for last 5 years. 2016-2022 in which year Bangladeshi sector have fdi
A: Foreign direct investment: It refers to the point at which an organization takes controlling…
Q: Mark can work up to 80 hours each week at a pre-tax hourly wage of $20 but faces a constant 20…
A: The budget line is downward sloping, indicating a tradeoff between income earned and the amount of…
Q: G2
A: Effective annual rate (EAR) = [1 + (r / m)]m - 1, where r: Stated annual nominal rate and m: Number…
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- 1. Consider a market where there are only two firms that produce a homogeneous product. The two firms face the direct market demand curve given Q = 15-p, where Q = 9₁ +92 and 9₁ and q2 are the quantities of firm 1 and firm 2, respectively. Suppose firm 1's total cost is C₁ = 9₁ and firm 2's total cost function is C₂ = 2q2. Suppose that the two firms act independently and choose their outputs simultaneously as in the Cournot model. Show the basis and briefly explain what is going on as you answer each of the following questions. Your mark will depend upon the correctness of your basis and explanation. 1. What is the equation of the demand curve faced by firm 1? What is the equation of the demand curve faced by firm 2? Find the output reaction function of each firm. 2. 3. Find the Nash-Cournot equilibrium quantity that each firm will produce. 4. At the Nash-Cournot equilibrium, at what price does each firm sell its output? 5. Find the consumer surplus, producer surplus at the…Suppose that there are two firms in an industry and they face market demand y=400-0.5p where y=y1+y2 . The total cost functions of the firms are C1(y1)= 40y1 and C2(y2)= 2y22. a) Assume initially that the firms enter into Cournot competition. Calculate the equilibrium market price and each firm’s equilibrium output. That is, find y1c, y2sand pc.b) Calculate the equilibrium market price and each firm’s equilibrium output assuming that firm 2 is the Stackelberg leader and firm 1 is the follower. That is, find y1s, y2sand ps.wo firms A and B produce an identical product (Note: Industry Output = Q). The firms have to decide how much output qA and qB (Note: qA = Firm A Output; qB = Firm B Output) they must produce since they are the only two firms in the industry that manufacture this product. Their marginal cost (MC) is equal to their average cost (AC) and it is constant at MC = AC = X, for both firms. Market demand is given as Q = Y – 2P (where P = price and Q = quantity). Select any value for X between [21 – 69] and any value for Y between [501 – 999]. Using this information, calculate the Industry Price, Industry Output, Industry Profit, Consumer Surplus and Deadweight Loss under each of the following models: (a) Cournot Model error_outlineHomework solutions you need when you need them. Subscribe now.arrow_forward Question Two firms A and B produce an identical product (Note: Industry Output = Q). The firms have to decide how much output qA and qB (Note: qA =…
- . The market for widgets consists of two firms that produce identical products. Competition in the market is such that each of the firms independently produces a quantity of output, and these quantities are then sold in the market at a price that is determined by the total amount produced by the two firms. Firm 2 is known to have a cost advantage over firm 1. A recent study found that the (inverse) market demand curve faced by the two firms is P = 280 – 2(Q1 + Q2), and costs are C1(Q1) = 3Q1 and C2(Q2) = 2Q2. a. Determine the marginal revenue for each firm. b. Determine the reaction function for each firm.Firm A and Firm B are the only two firms in a market where price is determined by the inverse demand function: P = 147 - Q. Q is the sum of Firm A and Firm B's output, so Q = 9A + 9B Firm A's total cost function is given by TCA(9A) = 39A Firm B's total cost function is given by TCB(9B) = 89B If these firms Cournot compete (simultaneously setting quantities), what will market price be when both firms are maximizing profits in equilibrium? (Note: The answer may not be a whole number, so round to the nearest hundredth)1. if the total cost function for this market is TC = 500 + 10Q2 , calculate the total and marginal costs for each of the quantities in the table. what is the demand function for this market? 2. What are the profit-maximizing quantity, price, and profit for this market? 3. If there are two firms Atlas and Bowden in this market with the same earlier total cost function and they engage in Cournot competition, what is each firm's equilibrium quantity, price, and profit? [NB: round quantities to nearest integer to find equilibrium quantity, price, and profit]
- 2.- Each of two firms, firms 1 and 2, has a cost function C(q) = 1 2 q; the demand function for the firms' output is Q = 1.5-p, where Q is the total output. Firms compete in prices. That is, firms choose simultaneously what price they charge. Consumers will buy from the firm offering the lowest price. In case of tying, firms split equally the demand at the (common) price. The firm that charges the higher price sells nothing. (Bertrand model.) (a) Formally argue that there could be no equilibrium in prices other than p1 = p2 = 1 2. (b) Solve the same problem, but this time assuming that firms compete in quantities.Now, suppose that firm 1 has a capacity constraint of 1/3. That is, no matter what demand it gets, it can serve at most 1/3 units. Suppose that these units are served to the consumers who are willing to pay the most. Thus, even if it sets a price above that of firm 1, firm 2 may be able to sell some output. (c) Obtain the (residual) demand of firm 2 (as a function of its own…In the domestic airline market, where companies compete on the number of seats they make available in the market measured in millions (x), the inverse of the demand for seats is pd(x) = 40 - 4x.Assume that there are 2 airlines: LON and Pacific Airlines. The marginal cost per seat of both airlines is 10:(a) Determine the market equilibrium (quantity produced by each firm, market price and profits). Graph(b) Assume that LON and Aerolineas del Pacifico collude and act as a monopoly. Calculate the number of seats (x) and the selling price.(c) What is the efficient number of seats that should be made available to consumers, and at what price would each seat be sold?The inverse market demand curve for salmon is given by P(Y) = 100 – 2Y, and the total cost function for any firm in the industry is given by TC(y) = 4y. a. Suppose that two Cournot firms operated in the market. What would be the reaction function for Firm 1 and the reaction function of Firm 2? (Notes: The marginal cost is not zero). If the firms were operating at the Cournot equilibrium point, what would the industry output and price be? b. For the Cournot case, draw the two reaction curves and indicate the equilibrium point on the graph
- Consider a duopoly market with 2 firms. Aggregate demand in this market is given byt Q = 500 – P, where P is the price on the market. Q is total market output, i.e., Q = QA + QB, where QA is the output by Firm A and QB is the output by Firm B. For both firms, marginal cost is given by MC = 20, i=A,B. « Assume the firms compete a la Cournot. e a) Find the inverse demand in this market. Note that marginal revenue for both firms is given by MRA=500-2QA-QB, MRB=500-QA-2QB. b) Describe what a best-response curve is and how to find it. c) Derive the best-response function for each firm. d) What are the equilibrium quantities? e) What is the total quantity supplied on this market? f) What is the equilibrium price in this market?Suppose two firms producing identical products compete in prices. If demand can be written as Q = a - bP and each firm has constant marginal cost c, what would be firm 2's best response to firm 1's price pi in the below figure: Firm 2's Profit P2 Pı (a+bc)/2b Pi Firm 2's Price Select one: O a. none of the other answers O b. P2 = c O. P2 = P1 O d. P2 = P1 - E O e. P2 = (a+bc)/2b2.- Each of two firms, firms 1 and 2, has a cost function C(q) = 0.5q; the demand function for the firms' output is Q = 1.5 - p, where Q is the total output. Firms compete in prices. That is, firms choose simultaneously what price they charge. Consumers will buy from the firm offering the lowest price. In case of tying, firms split equally the demand at the (common) price. The firm that charges the higher price sells nothing. (Bertrand model.) (a) Formally argue that there could be no equilibrium in prices other than p1 = p2 = 0.5 (b) Solve the same problem, but this time assuming that firms compete in quantities.Now, suppose that firm 1 has a capacity constraint of 1/3. That is, no matter what demand it gets, it can serve at most 1/3 units. Suppose that these units are served to the consumers who are willing to pay the most. Thus, even if it sets a price above that of firm 1, firm 2 may be able to sell some output. (c) Obtain the (residual) demand of firm 2 (as a function of its own…