Q firms a and b compete as cournot duopolists in the cola, Ask an Expert

Economics

Q. Firms A and B compete as Cournot duopolists in the cola market. The demand and
marginal revenue are given by: p = 200 - Y, where Y = yA + yB is total output. Marginal revenue
for each firm is
MRA = 200 - yB - 2yA, MRB = 200 - yA - 2yB.
The marginal cost of producing it is constant for both firms at $20 per case.
(a) Derive each firms best response function.
(b) Find the equilibrium price, quantities and profit for each firm.
(c) Why might these firms agree to form a cartel? If such a cartel is formed, use the prisoner's dilemma to explain why it may or may not survive.

View complete question

Business Economics, Economics

Category:- Business Economics
Reference No.:- M9722257

Have any Question?Write your Review or question?

Related Questions in Business Economics

Maureen has preferences for two goods to be consistent with

Maureen has preferences for two goods to be consistent with the utility function. The price of good 1 is $4 each, and the price of good 2 is $12 each. For what incomes will good 1 be normal?

A us electronics rm is considering moving its production to

A U.S. electronics ?rm is considering moving its production to a plant in Mexico. Its estimated production function is q = L0.5K0.5. In the U.S., the wage, w is ten dollars, and the cost of capital, r is also ten dollars ...

When we look at the ease to enter the different market

When we look at the ease to enter the different market structure, there is no doubt that 'monopoly' is the hardest. Why? -- There is only ONE firm that has established 'economies of scale' with the production of their go ...

What are the pros and cons of developing a global set of

What are the pros and cons of developing a global set of rules governing MNC (MNE) investment?

What effect does the teacher have on creating a learning

What effect does the teacher have on creating a learning environment with little to no behavior problems?

Eggsincnbspreported earnings available to common stock

Eggs,Inc. reported earnings available to common stock of $4200000 last year. From these earnings, the company paid a dividend of $1.26 on each of its 1000000 common shares outstanding. The capital structure of the compan ...

Demand qd900-2p3pa04m15asupply qs45500-05pqd quantity

Demand: Qd=900-2P+3Pa+0.4M+1.5A Supply: Qs=45500-0.5P Qd = Quantity demanded P = Price of Myvi car (in RM) Pa = Price of Produa Asia (in RM) M = Average consumer income (in RM) A = Promotional expenses Qs= Quantity deman ...

Suppose after collecting data on an existing firms actual

Suppose, after collecting data on an existing firm's actual short-run ouput, the following production function is found to match the data: TP = Q = 5*L + 0.6*L2 - 0.01*L3 1. Using the equation above, find the following ...

With its current leverage cow copr will have a net income

With its current leverage, COW COPR will have a net income next year of $7 million. If COW CORP corporate tax rate is 30% and it pays 7% interest on its debt, how much debt can COW CORP issue this year and still receive ...

Forty-nine percent of us teens have heard of a fax machine

Forty-nine percent of US teens have heard of a fax machine. You randomly select 12 US teens. Find the probability that the number of these selected teens that have heard of a fax machine is exactly six (first answer list ...

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