Ask Question, Ask an Expert

+61-413 786 465

info@mywordsolution.com

Ask Business Economics Expert

Economics


Home >> Business Economics

Firms 1 and 2 produce horizontally differentiated products. The demand for firm 1's product is given by the equation,

Q1 = 100 - P1 +P2/2

The demand for rm 2's product is given by the equation,

Q2 = 200 - 4P2 + 2P1.

Firm 1's marginal cost is MC1 = $10, while firm 2's marginal cost is MC2 = $20. The two Firms compete in Bertrand competition, by simultaneously selecting prices.

Question 1: Is Firm 2's product a substitute or a compliment for Firm 1's product? Briefly explain. Your answer must reference firm 1's demand function.

Question 2: Does the demand for firm 2's product satisfy the law of demand? Brieflyexplain. Your answer must reference firm 2's demand function.

Question 3: What is the equation of firm 1's best-response function?

Question 4: What is the equation of Firm 2's best-response function?

Question 5: Find the equilibrium prices.

Question 6: Find the equilibrium profits.

Question 7: Which firm enjoys the greater market power?

Business Economics, Economics

  • Category:- Business Economics
  • Reference No.:- M92474448
  • Price:- $35

Priced at Now at $35, Verified Solution

Have any Question?


Related Questions in Business Economics

Suppose you are a statistics consultant hired to study

Suppose you are a statistics consultant, hired to study whether a tax on alcohol has decreased average alcohol consumption in Australia. For a given sample of randomly selected individuals, you are able to obtain the dif ...

Describe the difference in economic profit between a

Describe the difference in economic profit between a competitive firm and a monopolist in both the short and long run. Which should take longer to reach the long-run equilibrium?

What is the difference between a positive economic

What is the difference between a positive economic statement and a normative one

What is the market price of a bond if the face value is

What is the market price of a bond if the face value is $1,000 and the yield to maturity is 6.2 percent? The bond has a 5.75 percent coupon rate and matures in 12.0 years. The bond pays interest semiannually.

According to the law of diminishing marginal utility the

According to the Law of Diminishing Marginal Utility, the consumer will receive less satisfaction when they consume additional units of goods and services. Explain 3 ways how the firm can influence the consumer purchasin ...

The widths of 86 randomly selected doors were found to have

The widths of 86 randomly selected doors were found to have a variance of 1.68. Construct the 90% confidence interval for the population variance of the widths of all doors in this factory. Round your answers to two deci ...

1 describe using pseudocode as described in class an

1. Describe using pseudocode as described in class an algorithm that takes a list of n integers a1, a2, ..., an, and finds the average of all negative integers in the list. Be sure to initialize the variables. 2. The bub ...

The demand for salt is relatively price inelastic while the

The demand for salt is relatively price inelastic, while the demand for pretzels is relatively price elastic. How can you best explain why and elaborate your answer.

A population has a mean mu83 and a standard deviation

A population has a mean μ=83 and a standard deviation σ=26. Find the mean and standard deviation of a sampling distribution of sample means with sample size n=247.

In a survey of women in a certain country ages 20-29 the

In a survey of women in a certain country? (ages 20-?29), the mean height was 65.3 inches with a standard deviation of 2.71 inches. Answer the following questions about the specified normal distribution. ?(a) What height ...

  • 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

Why might a bank avoid the use of interest rate swaps even

Why might a bank avoid the use of interest rate swaps, even when the institution is exposed to significant interest rate

Describe the difference between zero coupon bonds and

Describe the difference between zero coupon bonds and coupon bonds. Under what conditions will a coupon bond sell at a p

Compute the present value of an annuity of 880 per year

Compute the present value of an annuity of $ 880 per year for 16 years, given a discount rate of 6 percent per annum. As

Compute the present value of an 1150 payment made in ten

Compute the present value of an $1,150 payment made in ten years when the discount rate is 12 percent. (Do not round int

Compute the present value of an annuity of 699 per year

Compute the present value of an annuity of $ 699 per year for 19 years, given a discount rate of 6 percent per annum. As

Follow Us

© Copyright 2013-14 mywordsolution.com All rights reserved