Suppose that inverse demand is given bynbsp nbsp nbsp nbsp, Ask an Expert

Economics

Suppose that inverse demand is given by

D(Q) = 56 − 2Q, Q = q₁ + q₂

and the cost function is

TC(qi ) = 20q_i + f

(a) Find the limit output for fixed costs ( f ) equal to 50, 32, 18, and 2.

(b) What is the SPNE for the entry game with the following timing: in the first-stage firm 1 can commit to its output; in the second stage firm 2 can enter and choose its output for fixed costs equal to 50, 32, 18, and 2?

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M91992422

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