Two duopolistic oil producers are faced with the total demand function of P = 180– Q and the following cost functions: MC1 = 30 + Q1 MC2 = 20 + 2Q2 a. Determine the optimal
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Two duopolistic oil producers are faced with the total demand function of P = 180– Q and the following cost functions: MC1 = 30 + Q1 MC2 = 20 + 2Q2 a. Determine the optimal levels of output, using the Cournot solution. b. What are the optimal outputs, if the two firms form a cartel
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- 2. Two firms competing on output choice in an oligopolistic market face the following inverse market demand curve P = 100 – 1.5Q where Q = q1 + 92 Each firm faces a total cost function given as TC, = 6q1 TC, = 3q2 Assume the firms are Cournot competitors and determine the equilibrium quantity, price and profit for each firm.3. Two identical firms compete as a Cournot duopoly. The demand they face is P = 100 - 2Q. The cost function for each firm is C(Q) = 4Q. The equilibrium output of each firm is: a) 8 b) 16 c) 32 d) 36 How do I .solve this in detailed steps?HP and Sony compete primarily by price. Each firm must choose either a high price or a low price simultaneously. Use the following information to create the profit matrix: If HP and Lenovo both set high prices, HP’s profit is $40 million and Sony’s profit is $35 million. If HP sets high price and Sony sets low price, HP’s profit is $25 million and Sony’s profit is $40 million. If HP sets low price and Sony sets high price, HP’s profit is $50 million and Sony’s profit is $10 million. If HP and Sony set low prices, HP has $20 million and Sony has $15 million. Please answer the follow questions: Does Sony have a dominant strategy? HP? If so, which one? If HP and Sony maximize their profits non-cooperatively, what is the Nash-equilibrium for this profit matrix? Instead, if HP and Sony maximize their joint profits cooperatively, what is the equilibrium? Assume they keep their agreements.
- Which of the following best represents the pricing behavior of firms in an oligopolistic market? A) Stay*Put Clothespins takes the market price of clothespins as given and produces the amount of clothespins where marginal revenue equals marginal cost. B) Unykdrugs, Inc. produces where its marginal revenue is equal to its marginal cost and prices on its downward-sloping demand curve such that the market for its product clears, knowing it will not face competition due to patents it holds on its products. C) Teen Angle Hardware looks for a niche to sell its hardware products to teens but finds it difficult to earn anything more than normal profit due to other hardware stores also looking for niches. D) Looking Over Your Shoulder Handbag Co. chooses the price it charges by estimating what its rivals are most likely to do and then taking their responses into consideration.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.)6. Two firms, Firm 1 and Firm 2 and are engaged in Cournot competition. The inverse demand they are facing is given by p = 50-q, with p being the price of the good, and q being total quantity demanded, given by q = 91 +92, where 9₁ and 92 are the productions of firm 1 and 2 respectively. The total cost of firm 1 is TC1(91) = q and of firm 2 is TC₂ (92) = 292. (a) Find the Cournot equilibrium and the price that corresponds to it. (b) Find the Lerner Index of each firm.
- Suppose that the market demand for facial mud packs are given as follows: P = 2.200 - Q. Mud packs can be produced at no cost. Determine the level of output that would be produced by each firm in a cournot duopoly in the long run. Calculate th price charged for mud packs. Show all calculations.QUESTION 1A) Two cournot competitors face inverse demand P = 50 - Q. Where, Q = q1+q2, is the total output of firms 1 and 2. What are the equilibrium output levels for q1 and q2, If firm 1 marginal cost is 1, and firm 2's marginal cost is 12? QUESTION 1B. Continuing with the inverse demand, P = 50 - Q, if each firm has a marginal cost of 0, what is the difference between the equilibrium price under Cournot competition and under Bertrand competition? b. C. d. a. The Cournot price is higher than the Bertrand price by 50. The Cournot price is lower than the Bertrand price by 25. The Cournot price is higher than the Bertrand price by 50/3. Equilibrium prices under Cournot and Bertrand are the same, so the difference is zero.How do pricing strategies vary across markets that are characterized bymonopolistic, oligopolistic, monopolistic competition, and purecompetition?
- 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?In this assignment, we’re assuming you’re a manager of different types of buffalo wing restaurants. I’ll give different scenarios- some will require math and others will require writing. Cournot Oligopoly 2. Now, assume your buffalo wing firm is in a Cournot oligopoly with 3 additional firms. The market elasticity of demand for buffalo wings is -0.70. Find your firm’s elasticity of demand. Now find the profit-maximizing price for your firm if your marginal cost is $3.70.Duopoly and menu costs. (This is adapted from CaminaI 1987.) Consider two firms producing imperfect substitutes. Both firms can produce at zero marginal cost. The demand for the good produced by firm i is given by Now suppose that both firms enter the period with price p., which is the Nash equilibrium price for some value of a, a·. They know b and c. They each observe the value of a for the period, and each firm must independently quote a price for the period. If it wants to quote a price different from p*, it must pay a cost k. Otherwise, it pays nothing. Once prices are quoted, demand is allocated, demand determines produdion, and profits are realized. (b) Compute the set of values of a (around a*) for which not to adjust prices is a Nash equilibrium. (c) Compute the set of values of a (around a*) for which to adjust prices is a Nash equilibrium. (d) Check that all equilibria are symmetric and therefore that there are no other equilibria than the ones computed above.…