Two identical firms firm 1 and firm 2 compete in quantity, Ask an Expert

Economics

Two identical firms, Firm 1 and Firm 2, compete in quantity in a market where inverse demand is P(Q) = 100 − Q and there exists a constant marginal cost of 20 per unit.

(a) Find the Cournot equilibrium

i. Find the response functions q1(q2) and q2(q1)

ii. Plot the response functions on a single graph with the axes labeled iii. Find the quantities ˆq1 and ˆq2 corresponding to the intersection of the response functions

(b) Find the Stackelberg equilibrium

i. If Firm 1 moves first, what is the profit maximizing level of production, q ∗ 1?

ii. Find Firm 2’s level of production, q ∗ 2 , given what you found in part i.

View complete question

Business Economics, Economics

Category:- Business Economics
Reference No.:- M91401783

Have any Question?Write your Review or question?

Related Questions in Business Economics

A mixture of three water samples will test positive for a

A mixture of three water samples will test positive for a contaminant if at least one of the samples contains it. If the contaminant is present in 7% of samples, find the probability that: 1. The mixture tests positive: ...

The distribution of heights of adult american women is

The distribution of heights of adult American women is approximately normal with a mean of 64 inches and standard deviation of 2 inches. What percent of women is taller than 68 inches?

In your opinion if the government imposes unit sales tax ie

In your opinion, if the government imposes unit sales tax (i.e. $ tax per unit sold) on a product, will the market equilibrium change? Which one, demand or supply will shift? Increase or decrease? Will new tax cause "dis ...

A marketing company conducted a study where women and men

A marketing company conducted a study where women and men were asked to express a preference for one of two commercials-A or B-for the new iPhone XS. For the women, 44 out of 100 preferred commercial A. For the men, 79 o ...

Carefully explain how the negative price elasticity of

Carefully explain how the negative price elasticity of demand affect the revenue or profit of an organization?

Supposenbsppa02pa02nbspandnbsppb04pb04ifnbspanbspandnbspbnbs

Suppose P(A)=0.2 P(A)=0.2 and P(B)=0.4 P(B)=0.4.If A and B are disjoint, what is the probability that A or B occurs?P(A∪B)= If A and B are independent, what is the probability that A or B occurs?P(A∪B)=

I using the central limit theorem what is the distribution

I. Using the central limit theorem, what is the distribution of sample means when the population distribution is the following? PART (A) rectangular (a) positively skewed (b) uniformly distributed (c) normally distribute ...

If 1000 police officers are chosen at random and 720 have

If 1,000 police officers are chosen at random and 720 have graduated from a police academy. What interval can we be 95% sure contains the overall proportion of police officers who have graduated from a police academy?

On the ballot illinois voters had the option to select yes

On the ballot, Illinois voters had the option to select "yes" or "No" when asked if the state's minimum wage should be increased from $8.25 to $10 an hour by January 1, 2015. Before the actual voting date, a survey with ...

A quality controller selects 8 items at a predefined

A quality controller selects 8 items at a predefined interval and found that 75% of the time the item was non-defective. Let "S" represent the occurence of a non defective item. Assuming that this experiment is Binomial: ...

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