(Answered) An incumbent firm firm 1faces a potencial entrant

Economics

An incumbent firm, Firm 1,faces a potencial entrant, Firm2,that has a lower marginal cost.The market inverse demand function is p= 120 -Q1-Q2.Firm 1 has a constant marginal cost of $20,while firm 2 is $10 and they have no fixed cost.

1. What are the nash-cournot equilibrium price, quantities, and profits without government intervention?

2. To block entry,the incumbent appeals to the government to require that the entrant incur extra costs. What happens to the nash cournot equilibrium if the legal requirement causes the marginal cost of the second firm to rise to that of the first firm,$20?

View complete question

Business Economics, Economics

Category:- Business Economics
Reference No.:- M92258250
Price:- $20

Verified Expert

Priced at $40 Now at $20, Verified Solution

Have any Question?Write your Review or question?

Related Questions in Business Economics

How is the study of how firms decisions about prices and

How is the study of how firms' decisions about prices and quantities depend on the market conditions they face,the field of industrial organization, and the cost of production.

The tobacco industry is a prime example to consider when

The tobacco industry is a prime example to consider when talking about price elasticity of demand. While nicotine use can be addictive for many users, it is not addictive for the so-called "social smokers". What can we s ...

Fiona told her friend that she is very fortunate as the

Fiona told her friend that she is very fortunate as the slow-down in the economy has not decreased sales in her grocery store by much compared to sales of new cars in his car dealership. Explain what Fiona meant using th ...

Poblem 1 a firms production function c is given by c q

Problem 1. A firm's production function C is given by C (q) = 0:5q 2+2q 1 2 +18, where q is the level of output. (i) Calculate marginal costs (ii) If all fixed costs are sunk, and the minimum price at which this firm wil ...

1 a consumer has 300 to spend on goods x and y the market

1. A consumer has $300 to spend on goods X and Y. The market prices of these two goods are Px $15 and Py $5. a. What is the market rate of substitution between goods X and Y? b. Show how the consumer's opportunity set ch ...

You sell bicycle theft insurance if bicycle owners do not

You sell bicycle theft insurance. If bicycle owners do not know whether they are high- or low-risk consumers, is there an adverse selection problem?

Global poverty is an international issue other countries

Global poverty is an international issue. Other countries are inclined to look to the U.S. with its great wealth to take an active role in assisting poor nations. People here spend money trying to counter baldness while ...

A recent survey of post-secondary education students

A recent survey of post-secondary education students revealed that 70% own an iPhone. Suppose a random sample of 240 post-secondary students is taken. What is the probability that less than 162 students in the sample own ...

What does the term factors of production and the three most

What does the term, factors of production and the three most important factors of production?

A manufacture claims that the life span of its tires is

A manufacture claims that the life span of its tires is 52,000 miles. You work for a consumer protection agency and you are testing these tires. Assume the life spans of these tires are normally distributed. You select 1 ...

4,153,160 Questions Asked
13,132 Experts
2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Recent Questions

Ask Business Economics Expert