(Answered) Suppose that pepsi and coke are competing in a horizontally

Economics

Suppose that Pepsi and Coke are competing in a horizontally differentiated Bertrand market and setting prices. The demand curves are as follows:

Qc = 40-5Pc + 4Pp

Qc = 100-2Pp + Pc

Coke face marginal cost MCc = 12 and Pepsi faces marginal cost MCp = 8.

(a) Write the equation for the demand for coke in terms of price Pc as a function of Pp and Qc.

(b) Determine the marginal revenue for Coke as a function of Pp and Qc.

(d) Find the reaction function for Coke (Pc as a function of Pp ) using your answer above.

(e) Find the reaction function for Pepsi.

(f) Determine the Bertrand equilibrium.

View complete question

Business Economics, Economics

Category:- Business Economics
Reference No.:- M92544585
Price:- $25

Verified Expert

Priced at $50 Now at $25, Verified Solution

Have any Question?Write your Review or question?

Related Questions in Business Economics

Discuss three ranges of the aggregate supply curve explain

Discuss three ranges of the aggregate supply curve. Explain changes in the AD-AS macroeconomic equilibrium due to the aggregate demand shifts and due to aggregate supply shifts. Apply the AD-AS model to the two types of ...

Assume that the hypothetical economy of mo has 8 workers in

Assume that the hypothetical economy of Mo has 8 workers in year 1, each working 1,500 hours per year (50 weeks at 30 hours per week). The total input of labor is 12,000 hours. Productivity (average real output per hour ...

Some people eg hayek argue that decentralization of

Some people (e.g Hayek) argue that decentralization of economic decisions in the economy lead to an efficient resource allocation. What differences exist within the firm that make the link between decentralization and ef ...

How the manager use the information supposed the

How the Manager use the information "supposed the macroeconomic forecast predict that the economy will be expanding in the near future" in an organization?

Suppose we have a simple society with only 2 people 1

Suppose we have a simple society with only 2 people. 1 person is rich and earns $100,000 per year. 1 person is poor and earns $25,000 per year a) What percentage of total income does the rich person earn? b) Now suppose ...

Suppose that thenbspwall street journalnbspreports that we

Suppose that the Wall Street Journal reports that we are headed for a recession. You are the manager of a firm that produces Starcho Lunch. Your marketing research people tell you that the demand for your product is gi ...

Suppose that college science textbooks on average cost 225

Suppose that college science textbooks on average cost 225 dollars with a standard deviation of 45 dollars. Suppose that a random sample of 40 college science textbooks was taken. Find the probability that the sample mea ...

Currently fringe benefits make up about 30 of us workers

Currently, fringe benefits make up about 30% of U.S. workers' total compensation. Suppose the U.S. government decides to tax fringe benefits as ordinary income. How might this affect the level of fringe benefits as a sha ...

Describe how government-supported big business during the

Describe how government-supported big business during the Reagan Era effected the U.S. economy and labor unions.

Once you have the total product curve plotted with the

Once you have the total product curve plotted with the below data, how do you calculate the average product of labor at different units of labor? And the marginal products of labor? 1 unit of labor=2 outputs per week 2 u ...

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