Now? suppose? that? the ?first ?firm? has? a ?capacity ?of, Ask an Expert

Economics

Q. Consider ?the ?following ?market ?for ?a ?single ?good ?X ?with? two? firms ?that compete ?via? price? (Bertrand).?You? are ?given ?that ?P?=?30-3Q.

a) ?Suppose ?initially ?that ?both ?firms ?have ?unlimited? capacities ?and? marginal? cost? of? 3.?What ?is? the? resulting? equilibrium? price? and ?total?quantity? in? the ?market? ??Prove ?your? answer.

b) ?Now? suppose? that? the ?first ?firm? has? a ?capacity ?of ?2 ?and? the? second? firm? has ?a ?capacity ?of ?4.? What? is? the? resulting ?equilibrium ?price?and? quantity? for? each? firm ?and? for ?the? market? as ?a? whole??Prove ?your ?result.

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M9157249

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