Consider the following oligopolistic market. In the first stage, Firm 1 chooses quantity q. Firms 2 and 3 observe Firm 1's choice, and then proceed to simultaneouslychoose q2 and q1, respectively.Market demand is given by p(O) = 100 – Q, and Q = q1 + 42 + 41. Firm 1's costs are c, (41) = 34, firm 2's costs are cz(4,) = 34; and firm 3's costs arecs(qs) = 3q,.Starting from the end of the game, you can express Firm 2's best response function in terms of q and q3, and you can similarly express Firm 3's best responsefunction in terms of qi and q2. Using these, answer the following questions.a) If Firm 1 chooses q1 = 9, what quantity will Firm 2 choose?b) If Firm 1 chooses qi = 100, what quantity will Firm 2 choose?c) in the subgame perfect Nash equilibrium of this game, firm 1 produces what quantity?d) In the subgame perfect Nash equilibrium of this game, firm 2 and firm 3 each produce what quantity?

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Consider the following oligopolistic market. In the first stage, Firm 1 chooses quantity q. Firms 2 and 3 observe Firm 1's choice, and then proceed to simultaneously choose q; and q, respectively. Market demand is given by PO) = 100 - 0, and Q= q +9: +4. Firm t's costs are c, (q) = 341. ferm 2's costs are cy(q,) = 30; and firm 3's costs are Starting from the end of the game, you can express Firm 2's best response function in terms of q and g, and you can similarly express Firm 3's best response function in terms of q and q. Using these, answer the following questions. a) Firm 1 chooses q = 9, what quantity will Firm 2 choose? b) f Firm 1 chooses qi = 100, what quantity wil Firm 2 choose? e) in the subgame perfect Nash equilibrium of this game, firm 1 produces what quantity? d) in the subgame perfect Nash equilibrium of this game, firm 2 and ferm 3 each produce what quantity?

Consider the following oligopolistic market. In the first stage, Firm 1 chooses quantity q. Firms 2 and 3 observe Firm 1's choice, and then proceed to simultaneously choose q; and q, respectively. Market demand is given by PO) = 100 - 0, and Q= q +9: +4. Firm t's costs are c, (q) = 341. ferm 2's costs are cy(q,) = 30; and firm 3's costs are Starting from the end of the game, you can express Firm 2's best response function in terms of q and g, and you can similarly express Firm 3's best response function in terms of q and q. Using these, answer the following questions. a) Firm 1 chooses q = 9, what quantity will Firm 2 choose? b) f Firm 1 chooses qi = 100, what quantity wil Firm 2 choose? e) in the subgame perfect Nash equilibrium of this game, firm 1 produces what quantity? d) in the subgame perfect Nash equilibrium of this game, firm 2 and ferm 3 each produce what quantity?

Survey of Economics (MindTap Course List)

9th Edition

ISBN:9781305260948

Author:Irvin B. Tucker

Publisher:Irvin B. Tucker

Chapter9: Monopolistic Competition And Oligoply

Section: Chapter Questions

Problem 20SQ

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Consider the following oligopolistic market. In the first stage, Firm 1 chooses quantity q1. Firms 2 and 3 observe Firm 1's choice, and then proceed to simultaneously choose q2 and q3, respectively. Market demand is given by p(Q) = 100 – Q, and Q = q1 ++ q2 + q3. Firm 1's costs are c (q1) = lq,, firm 2's costs are c2(q2) = 442 and firm 3's costs are c3(q3) = 4q3. Starting from the end of the game, you can express Firm 2's best response function in terms of qi and 93, and you can similarly express Firm 3's best response function in terms of q and q2. Using these, answer the following questions. a) (0.5 point) If Firm 1 chooses q = 12, what quantity will Firm 2 choose? b) (0.5 point) If Firm 1 chooses g = 100, what quantity will Firm 2 choose? c) (1 point) In the subgame perfect Nash equilibrium of this game, firm 1 produces what quantity? d) (0.5 point) in the subgame perfect Nash equilibrium of this game, firm 2 and firm 3 each produce what quantity? Finish attempt .. ious page Site…
Consider the following oligopolistic market. In the first stage, Firm 1 chooses quantity q₁. Firms 2 and 3 observe Firm 1's choice, and then proceed to simultaneously choose q2 and 93, respectively. Market demand is given by p(Q) = 100 – Q, and Q = 9₁ +9₂ +93. Firm 1's costs are c₁ (9₁) = 1q₁, firm 2's costs are c₂(9₂) = 6q2 and firm 3's costs are C3(93) = 693. Starting from the end of the game, you can express Firm 2's best response function in terms of 9₁ and 93, and you can similarly express Firm 3's best response function in terms of q₁ and q₂. Using these, answer the following questions. a) If Firm 1 chooses q₁ = 9, what quantity will Firm 2 choose? b) If Firm 1 chooses q₁ = 100, what quantity will Firm 2 choose? c) In the subgame perfect Nash equilibrium of this game, firm 1 produces what quantity? d) In the subgame perfect Nash equilibrium of this game, firm 2 and firm 3 each produce what quantity?
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