Assume that two companies (C and D) are Cournot duopolists that produce identical products. Demand for the products is given by the following linear demand function: P = 600 - Qc - QD %3D where Qc and Qp are the quantities sold by the respective firms and P is the price. Total cost functions for the two companies are TC 25,000 + 100QC TC, = 20,000 + 125QD %3D a. Determine the profit functions for both firms. b. Given the cost functions, which firm will produce more in an equilibrium? c. Determine the equilibrium price and quantities sold by each firm. d Determine the profits for the market as well as each firm.
Q: Suppose that identical duopoly firms have constant marginal costs of $16 per unit. Firm 1 faces a…
A: Bertrand competition is a model of competition used in economics, named after Joseph Louis François…
Q: A monopolistic producer of two goods, 1 and 2, has a joint total cost function…
A: Given: The total cost function is: TC = 10Q1 + Q1Q2 + 10Q2 The demand equation for P1 is: P1 = 50 -…
Q: Question 1: Assumed that Boeing (firm 1) and Airbus (firm 2) face the following market demand curve…
A: Let firm 1 be the first mover and firm 2 be the follower. Reaction function of firm 2 : Q2=15-0.5Q1…
Q: utput TC function includes a risk adjusted normal rate of return on the firm’s investment In the…
A: Given: TC=100+3Q+0.03Q^2 TR=11Q-0.01Q^2
Q: A monopolistic producer of two goods, 1 and 2, has a joint total cost function TC = 10Q, +Q,Q2+10Q,…
A: The following problem has been solved as follows:
Q: Suppose that firms in the US auto industry are symmetric and compete based on monopolistic…
A: Given : Demand=16 million cars Demand function : q=16,000,000[1n-136000(P-P')] TC=640,000,000+15000q…
Q: Assume that two companies (A and B) are duopolists who produce identical products. Demand for the…
A: We have, Demand function: P = 200-QA- QB Total cost of firm A: TCA = 1500 + 55QA +QA^2 Total cost of…
Q: Duopolists following the Cournot strategy face a market demand curve given by P=50-2Q where Q is…
A: Monopolist is a market structure wherein there is only a single seller who produces a unique good.…
Q: Alpha and Gamma are the only two phone handset manufacturers in the world. Each firm has a cost…
A: An oligopoly market is one that has few large firms which are interdependent selling homogenous as…
Q: Suppose that a manufacturer produces two brands of a product, brand 1 and brand 2. Suppose the…
A: We are going to find the profit maximizing P1 and P2 to answer this question.
Q: Suppose that identical duopoly firms have constant marginal costs of $16 per unit. Firm 1 faces a…
A: The Bertrand (Nash) equilibrium corresponds to price being equal to marginal cost.
Q: Problem 1 - Duopoly Models Two firms produce a homogeneous product. Let p denote the product's…
A: The equilibrium price(P) and quantity(Q) can be estimated by using the following steps: First: Find…
Q: Suppose we have two identical firms A and B, selling identical products. They are the only firms in…
A: Firms produces the goods when their marginal revenue is equal to the marginal cost . MC= MR .…
Q: The two major producers in the beer industry, Anheuser-Bush (Firm 1) and Grupo Modelo (Firm 2) are…
A: For the level of output and profits when Firm 2 cheats and Firm 1 colludes, firstly we find the…
Q: 3. Assume that two companies (C and D) are duopolists that produce identical products. Demand for…
A: Answer: Given, Demand function: P=600-QC-QDWhere QC and QD are the quantities sold by firm C and D…
Q: The market demand in a homogeneous-product Cournot duopoly is P = 113 - 2.2Q, where Q = Q1 + Q2…
A: If they engage in collusion and behave as a monopoly then the profit-maximizing equilibrium is given…
Q: Q6 Suppose the market demand is given by Q 3 100 — р, where Q is the total quantity demanded and p…
A: For most competitive equilibria, the First Order Conditions for profit maximisation can be deduced…
Q: Suppose that identical duopoly firms have constant marginal costs of $16 per unit. Firm 1 faces a…
A: Answer: Let us first find the marginal revenue for both the firms: Total revenue of firm…
Q: [Suppose] A Cmpany is the sole provider of electricity in the various districts of Dubai. To meet…
A: Given P = 1,200 − 4Q, C1(Q1) = 8,000 + 6Q1 C2(Q2) = 6,000 + 3Q2 + 5Q22
Q: Two firms compete in a market to sell a homogeneous product with inverse demand function P = 600 −…
A: Given, inverse demand function P = 600 – 3Q MC = 300…
Q: Suppose the inverse demand function for two Cournot duopolists is given by P = 10 – (Q1 + Q2) and…
A: a. According to the question, Cournot duopolist have demand for P = 10 –(Q1 + Q2)With MC1=MC2 =…
Q: Assume that two companies (C and D) are duopolists that produce identical products. Demand for the…
A: Given P=600-Qc-Qd TCc=25,000+100Qc (Total Cost of Company C) TCd=20,000+125Qd (Total Cost of…
Q: Consider a market competing under Cournot Quantity Competition. There are two firms in this market:…
A: We have given demand function and marginal costs, we can find the profit function as
Q: Suppose we have an electric power system with just two time periods: peak and off- peak. There are…
A: Answer - Given in the question- A price of $10/MW for off-peak and $20/MW peak Need to find-…
Q: A homogeneous products duopoly faces a market demand function given by P = 300 − 3Q, where Q = Q1…
A: Demand function, P = 300 - 3Q Marginal cost, MC = 100 The output of firm2 = 50 units
Q: Assume a market consists of two upstream firms, and they are sole suppliers of their respective…
A: Vertical integration is a strategy where a company either owns or controls its…
Q: Suppose that identical duopoly firms have constant marginal costs of $10 per unit. Firm 1 faces a…
A: In the Bertrand model, the function of monopoly profit is bounded, firms have identical and constant…
Q: Suppose] A Cmpany is the sole provider of electricity in the various districts of Dubai. To meet the…
A: 1.P=1200-4Q Q=Q1+Q2 P=1200-4(Q1+Q2) For firm1: Total Revenue:PQ1 TR1=1200Q1-4Q1^2-4Q1Q2…
Q: Suppose two firms compete as Bertrand duopolists for an identical product, where demand is given by…
A: In the Bertrand oligopoly model, the duopolists or both firms determine their price simultaneously.…
Q: Suppose there are two firms operating in the same market and compete over prices. the firms sell a…
A: q1=-1.5p1+p2+273q2=0.5p1-1.5p2+293TR1=p1q1 =p1(-1.5p1+p2+273)…
Q: You are the manager of BlackSpot Computers, which competes directly with Condensed Computers to sell…
A: P = 5900 - Q MC = $500 In order to determine reaction function of duopolist firms we set price is…
Q: Tom is a monopolist input supplier to Dick and Harry. Tom's marginal cost is 1. Dick and Harry are…
A: The maximum revenue/profit that a producer can possibly earn is analyzed given a certain price,…
Q: There are two firms, Firm 1 and Firm 2. The two firms’ products are viewed as identical by most…
A: There are two firms : Firm 1 & Firm 2 Cost function of firm 1 : C(Q1) = 10 + 4Q1 Average Cost…
Q: You are given the market demand function Q = 3400 – 1000p, and that each duopoly firm's marginal…
A:
Q: For Company A, the long-run equilibrium output is and the selling price is $ .…
A:
Q: Suppose] A Cmpany is the sole provider of electricity in the various districts of Dubai. To meet the…
A: Profit for facility 1 = MR1 = MC1 MR1 = d(TR)/dQ1 TR1 = (1200 -4(Q1+Q2))Q1 TR1 = 1200Q1 - 4Q12 -…
Q: Consider the following Stackelberg duopoly. Both firms produce differentiated goods. For form 1, the…
A: Stackelberg duopoly is a model in which leader can make first move and follower can make other one ,…
Q: Assume that two companies (A and B) are duopolists who produce identical products. Demand for the…
A: The demand function represents the connection between the quantity demanded of a commodity…
Q: Assume that two companies (C and D) are duopolists that produce identical products. Demand for the…
A: Given; Demand function; P=600-QC-QD Total Cost function of C; TCC=25000+100QC Total Cost function of…
Q: Assume that two companies (C and D) are duopolists that produce identical products. Demand for the…
A: Given, TCC=15,000+50QC TCD=10,000+75QD P = 1000 – QC - QD
Q: A homogeneous product duopoly faces a market demand function given by p = 300 - 3Q,where Q = q1 +…
A: The equilibrium price is the only price where the plans of consumers and the plans of producers…
Q: Suppose the inverse demand for a particular good is given by P = 1200 – 12Q. Furthermore, th are…
A: Stackelberg duopoly model is the competition between two firm such that one of them is a…
Q: Initially there are six firms producing differentiated products. The demand function for the good…
A: There are 6 firms . Demand function of each firm : qi = 10 - 2pi + 0.3 (P5 ) where , P5 = sum of…
Q: Suppose Microsoft to the 4 individuals is selling the two products below with their willingness to…
A: Cost of Word press = $10 Cost of spreadsheet = $10
Q: The market demand in a homogeneous-product Cournot duopoly is P = 113 - 2.2Q, where Q = Q1 + Q2…
A: For the level of output and profits when Firm 2 cheats and Firm 1 colludes , firstly we find the…
Q: We assume that there are two countries, X and Y, each has a monopolistically competitive Home…
A: Krugman's model definition Krugman's model is defined as new trade theory and is based on free trade…
Q: Suppose that Kenya Railways serves two major separate customers, namely: urban users and rural users…
A: Total Cost TC = 25+10Q Differentiate with respect to Q to find Marginal Cost MC = 10 Customer 1…
Q: Two firms both produce leather boots. The inverse demand equation is given by P = 280 Q, where Pis…
A: According to the question, there are 2 firms in oligopoly and creating the Bertrand model. Let say…
Q: Suppose] A Cmpany is the sole provider of electricity in the various districts of Dubai. To meet the…
A: We are going to find the revenue function, marginal revenue function to answer this question. .
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
- Additional Problem 3: Assume two companies (C and D) are Cournot duopolists that produce identical products. Demand for the products is given by the following linear demand function: ? = 600 − ?C − ?D where ?C and ?D are the quantities sold by the respective firms and P is the price. Total cost functions for the two companies are ??C= 25,000 +100?C 2 ??D = 20,000 + 125?D c. Determine the equilibrium price and quantities sold by each firm. d.Determine the profits for the market as well as eachfirm.Assume that two companies (C and D) are duopolists that produce identical products. Demand for the products is given by the following linear demand function:P=1000−QC−QDwhere QC and QD are the quantities sold by the respective firms and P is the selling price. Total cost functions for the two companies are TCC=15,000+50QC TCD=10,000+75QD Assume that the firms act independently as in the Cournot model (i.e., each firm assumes that the other firm’s output will not change). Please, find the equilibrium output of firm C.Suppose the total demand for specialty coffee per hour in Ruston is Q = 640 - 80P. There are six (n = 6) monopolistically competitive firms currently in the market selling some variety of specialty coffee, each with total cost curves given by: TC₁ = 20+q; +0.0125q²| a. Find the proportional demand faced by one coffee shop, denoted Firm i. That is, suppose the firms have equal market share and determine the demand function for a single firm. b. Calculate the optimal quantity produced by Firm i. c. Calculate Firm i's profits. Will there be entry or exit by other coffee shops over time? d. Provide a generic graph the long-run outcome for Firm i given your prediction from (c). Label curves, axes, and intersection points.
- There are only two driveway paving companies in a small town, Asphalt, Inc. and Blacktop Bros. The inverse demand curve for paving services is ?= 2040 ―20? where quantity is measured in pave jobs per month and price is measured in dollars per job. Assume Asphalt, Inc. has a marginal cost of $100 per driveway and Blacktop Bros. has a marginal cost of $150. Answer the following questions: Determine each firm’s reaction curve and graph it. How many paving jobs will each firm produce in Cournot equilibrium? What will the market price of a pave job be? How much profit does each firm earn?(b) Consider two firms, 1 and 2 , operating in a monopolistic competitive market. The cost functions of the firms are: TC_(1)=20+20 Q and TC_(2)=80+80Q, respectively. Would it be rational for both firms to compete in the world market, given the market demand curve of Q=100-P, and they have to bear a trade cost of $30 per unit? Explain with the help of a diagram. please give answer with compleete steps and diagram.per pair You are the CEO of a company that advises clients on pricing strategies. Bilbo Baggins is a profit maximizing client who produces uniquely styled shoes and hires you for pricing advice. The graph shows the demand and marginal revenue (MR) curves faced by Bilbo's company for two different groups of consumers. Assume Bilbo can prevent the reselling of his shoes, faces constant marginal cost (MC) equal to $20/pair, can identify varying consumer groups, and has no fixed costs (so, MC ATC). Use the graph to answer the questions. = Price $100 90 80 70 60 50 40 B What price should Bilbo charge? He should charge the more elastic group $60/pair and the less elastic group $70/pair. 30 30 20 10 10 MR 2 Demand 2 He should shutdown in the short run because price is not greater than fixed costs. 0 100 200 300 40C He should price discriminate and produce where P = MC and charge $20/pair. He should produce where MR = MC and charge $70/pair.
- Gamma and Zeta are the only two widget manufacturers in the world. Each firm has a cost function given by: C(q) = 10+20q + q^2, where q is number of widgets produced. The market demand for widgets is represented by the inverse demand equation: P = 200 - 2Q where Q = q1 + q2 is total output. Suppose that each firm maximizes its profits taking its rival's output as given (i.e. the firms behave as Cournot oligopolists). a) What will be the equilibrium quantity selected by each firm? What is the market price? What is the profit level for each firm? Equilibrium quantity for each firm__ price__ profit__ b) It occurs to the managers of Gamma and Zeta that they could do a lot better by colluding. If the two firms were to collude in a symmetric equilibrium, what would be the profit-maximizing choice of output for each firm? What is the industry price? What is the profit for each firm in this case? Equilibrium quantity for each firm__ price__ profit__ c) What minimum discount factor is required…Suppose that Kenya Railways serves two major separate customers, namely: urban users and rural users of the railway line. The company can charge different prices to these two customers. Suppose that the total cost for running trips by Kenya Railways is given by the following cost function: C= 25+10Q Where: C = total cost Q = total output of trips made by the railway line The inverse demand functions for the two customers are given as follows: P1 = 40-5Q1 P2 =90-2Q2 Where: p1 = Price charged to urban users; and is number of trips by urban users p2 = Price charged to rural users; and is number of trips by rural users Required: How many trips should Kenya Railway serve in each market and what price should the firm charge in each market? Compute the profits of Kenya Railways without price discrimination From your knowledge of the relationships between various costs of production, fill in the blanks of Table 1 below: Table 1 Q TC…Assume the inverse demand function in a market is given by P(Q) = 500 - Q where Q is the total industry output, that is the sum of the output of all firms in the market. There are two firms (indexed by i = 1,2) who both have a cost of producing the good given by c(qi) = 10 * qi The two firms are competing in the Cournot manner, that is they choose their quantities simultaneously in order to maximize profits.
- Alpha and Gamma are the only two phone handset manufacturers in the world. Each firm has a cost function given by: C(q) = cq + q?, where q is number of phones produced and c=70. The market demand for phones is represented by the inverse demand equation: P = a - bQ where Q = q1 + q2 is total output, a=250 and b=1. Suppose that each firm maximizes its profits taking its rival's output as given (i.e. the firms behave as Cournot oligopolists). a) What will be the equilibrium quantity selected by each firm? What is the market price? What is the profit level for each firm? Equilibrium quantity for each firm , price , profit b) It occurs to the managers of Alpha and Gamma that they could do a lot better by colluding. If the two firms were to collude, what would be the profit-maximizing choice of output for each firm? What is the industry price? What is the profit for each firm in this case? Equilibrium quantity for each firm , price , profit c) What minimum discount factor is required for…[Suppose] A Cmpany is the sole provider of electricity in the various districts of Dubai. To meet the monthly demand for electricity in these districts, which is given by the inverse demand function: P = 1,200 − 4Q, the company has set up two electric generating facilities: Q1 kilowatts are produced at facility 1 and Q2 kilowatts are produced at facility 2; where Q = Q1 + Q2. The costs of producing electricity at each facility are given by C1(Q1) = 8,000 + 6Q1 C2(Q2) = 6,000 + 3Q2 + 5Q22 What is the MR function? What is the MC function of each facility? What is the MC function of the firm?[Suppose] A Cmpany is the sole provider of electricity in the various districts of Dubai. To meet the monthly demand for electricity in these districts, which is given by the inverse demand function: P = 1,200 − 4Q, the company has set up two electric generating facilities: Q1 kilowatts are produced at facility 1 and Q2 kilowatts are produced at facility 2; where Q = Q1 + Q2. The costs of producing electricity at each facility are given by C1(Q1) = 8,000 + 6Q1 C2(Q2) = 6,000 + 3Q2 + 5Q22 What is the MR function? What is the MC function of each facility? What is the MC function of the firm? Calculate the profit maximizing output levels of each factory? What is the profit maximizing level of price? What is the maximum profit?