Business, 03.11.2020 17:10, kirstennnash

1. Market demand for gizmos is P = 750 − 0.5Q. Suppose there are two firms in the gizmo industry, selling identical products. Firm 1’s cost function is , and firm 2’s cost function is C2(Q2) = 10Q2. (a) Suppose that the gizmo firms compete on quantity and move simultaneously (i. e., they are in a Cournot duopoly). i. Derive each firm’s best response function. ii. Find the Cournot equilibrium levels of output for each firm. iii. Find the market price and profits for each firm. (b) Suppose instead that firm 1 is able to start production before firm 2. i. Find the Stackelberg equilibrium levels of output for each firm. ii. Find the market price and profits for each firm. (c) Comparing the two duopoly situations, does the Cournot or Stackelberg duopoly result in greater industry profits? Which situation does firm 1 prefer? Which situation does firm 2 prefer?

Answers: 3

Show answers

Other questions on the subject: Business

Business, 21.06.2019 18:30, emblemhacks

As the marginal propensity to consume (mpc) increases, the multiplier remains the same. increases. decreases. as the marginal propensity to save (mps) increases, the multiplier decreases. increases. remains the same. if the marginal propensity to consume is 0.30, what is the multiplier, assuming there are no taxes or imports? round to the tenths place. given the multiplier that you calculated, by how much will gross domestic product (gdp) increase when there is a $1,000 increase in government spending? $

Answers: 3

continue

Business, 22.06.2019 17:00, whitakers87

Dan wants to start a supermarket in his hometown, and wants to get into the business only after finding out about the market and how successful his business might be. the best way for dan to gain knowledge is to:

Answers: 2

continue

Business, 22.06.2019 18:30, saneayahsimmons

What historical context does wiesel convey using the allusion of a fiery sky? he compares the sky to hell. the fires from air raids during world war ii the cremation of jews in the concentration camps the outbreak of forest fires from bombs in world war ii

Answers: 1

continue

Business, 22.06.2019 21:30, robert7248

Consider the following three bond quotes; a treasury note quoted at 87.25, and a corporate bond quoted at 102.42, and a municipal bond quoted at 101.45. if the treasury and corporate bonds have a par value of $1,000 and the municipal bond has a par value of $5,000, what is the price of these three bonds in dollars? multiple choice $872.50, $1,000, $1,000, respectively $1,000, $1,024.20, $1,001.45, respectively $872.50, $1,024.20, $5,072.50, respectively $1,000, $1,000, $1,000, respectively

Answers: 3

continue

Do you know the correct answer?

1. Market demand for gizmos is P = 750 − 0.5Q. Suppose there are two firms in the gizmo industry, se...