Suppose that two firms are cournot competitors industry, Ask an Expert

Economics

Suppose that two firms are Cournot competitors. Industry demand is given by P = 200 − q1 − q2, where q1 is the output of Firm 1 and q2 is the output of Firm 2. Both firms face constant marginal and average total costs of $20. Firm 1 is considering investing in costly technology that will enable it to reduce its costs to $15 per unit. What is the most Firm 1 would be willing to pay if it can guarantee that Firm 2 will not be able to acquire it? Assume that initially each firm is in Cournot equilibrium without the new technology.

$333.33

$411.11

$444.44

$366.66

View complete question

Business Economics, Economics

Category:- Business Economics
Reference No.:- M92201934

Have any Question?Write your Review or question?

Related Questions in Business Economics

Why are farmers paid so little the price of agricultural

Why are farmers paid so little? The price of agricultural goods like chickens and coffee has been falling for decades and the share going to farmers has also been falling. What is the "Global division of labor" in food p ...

A soda vendor at aloha stadium noticed that during rainbow

A soda vendor at Aloha Stadium noticed that during Rainbow Warrior football games that more soda is being served the warmer the temperature during game time. Based on 40 home games covering the past 5 years, the vendor e ...

At a college 66 of courses have final exams and 56nbsp of

At a college, 66 % of courses have final exams and 56 % of courses require research papers. Suppose that 45 % of courses have a research paper and a final exam. Find the probability that a course has NONE of these two r ...

You work in the quality control office for a company that

You work in the quality control office for a company that manufactures fluorescent light bulbs. Your company offers a 4-year (1461 day) warranty on these bulbs. The average life span of your bulbs is 1600 days with a sta ...

If a firms total cost function is given byt c

If a firm's total cost function is given byT C= 115,000Q-500Q2+Q3, what range of output does the firm have economies of scale?

A company is considering producing a new product based on

A company is considering producing a new product. Based on past records, management believes that there is a 70 percent chance that the new product will be successful, and a 30 percent chance it will not be successful. M ...

1 dominos pizza is willing is willing to pay kes 250 in

1. Domino's pizza is willing is willing to pay Kes 250 in airtime to each person interviewed about his or likes and dislikes of types of pizza crust. Of the people interviewed, 220 liked a thin crust, 270 like a thick cr ...

Do you think that the taxicab industry in large cities

Do you think that the taxicab industry in large cities would be subject to significant economies of scale? Why or why not?

How does health insurance coverage affect the incentive to

How does health insurance coverage affect the incentive to reduce medical expenses? For the insured person? For the provider of services? What happens to the incentive to hold down medical expenses once the initial insur ...

How does consumers influence the market price of goods it

How does consumers influence the market price of goods it sells, and what does the term, "market power" means?

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