(Answered) Two firms compete by choosing pricenbsptheir demand

Economics

Two firms compete by choosing price. Their demand functions are Q1 = 20 - P1 + 0.4P2 and Q2 = 20 + 0.4P1 - P2. Marginal costs are 3.

a. Suppose the two firms set their prices simultaneously. Find the resulting Nash Equilibrium prices. How much will each firm sell? What will each firm's profits be?

b. Suppose Firm 1 sets its price first and then Firm 2 sets its price. What will the SGPE prices be? How much will each firm sell? What will each firm's profits be?

c. Suppose you are one of these firms, and there are three ways you could play the game: (i) both firms set prices simultaneously; (ii) you set price first; (iii) your competitor sets price first.

If you could choose among these options, which would you prefer and why?

View complete question

Business Economics, Economics

Category:- Business Economics
Reference No.:- M92321587
Price:- $15

Verified Expert

Priced at $30 Now at $15, 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 ...

Consider the following production function that is already

Consider the following production function that is already written in per worker terms: y = Akαh 1-α where h represents human capital per worker. Suppose we are given the following information: capital per worker in an e ...

In 2011 new jersey governor chris christie announced that

In 2011, New Jersey Governor Chris Christie announced that he would pull the state out of the Regional Greenhouse Gas Initiative (RGGI), which is a coalition of 10 states that agreed to reduce their emissions of carbon d ...

Suppose the production function for a firm is given

Suppose the production function for a firm is given by: q=4L 0.5 K 0.25 . In the short run, the firm has 16 units of capital. Find the Marginal Product of Labor (MP L ). Fill in the appropriate numbers in the function ...

How can local the local government help prepare employees

How can local the local government help prepare employees for higher level positions in the organization.

In a survey of women in a certain country ages 20-29 the

In a survey of women in a certain country? (ages 20-?29), the mean height was 65.3 inches with a standard deviation of 2.71 inches. Answer the following questions about the specified normal distribution. ?(a) What height ...

Thirty-five percent of teens buy soda pop at least once

Thirty-five percent of teens buy soda (pop) at least once each week. Eleven kids are randomly selected. The random variable represents the number of these kids who purchase soda (pop) at least once each week. For this to ...

American heart association is about to conduct an

American Heart Association is about to conduct an anti-smoking campaign and wants to know the fraction of Americans over 33 who smoke. Step 1 of 2: Suppose a sample of 1179 Americans over 33 is drawn. Of these people, 27 ...

A population has a mean mu83 and a standard deviation

A population has a mean μ=83 and a standard deviation σ=26. Find the mean and standard deviation of a sampling distribution of sample means with sample size n=247.

Whats your answer about the equilibrium change from an

What's your answer about the equilibrium change from an event which decreases both demand and supply? You don't need to provide graph here. Just describe the curve shifts and how the equilibrium price and equilibrium qua ...

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