In a market with a Duopoly, if Market Demand is P=300-Q find the Cournot reaction curves and the Cournot Quantity solutions then deduce the Price in the case where Marginal Costs curves for either of the Duopoly firms is MC₁=q₁+30 and MC₂=q₂+30. Compare your results to the case where a Monopolist that has a MC=Q+30 replaces the Duopoly. What are the Monopoly Quantity and Price? Which quantities are bigger, Cournot or Monopoly? What is the Consumer Surplus in both cases? Set-up the Oligopoly model in a game theoretical prisoner's dilemma framework. Explain briefly the strategies and how you reach the Nash Equilibrium.

In a market with a Duopoly, if Market Demand is P=300-Q find the Cournot reaction curves and the Cournot Quantity solutions then deduce the Price in the case where Marginal Costs curves for either of the Duopoly firms is MC₁=q₁+30 and MC₂=q₂+30. Compare your results to the case where a Monopolist that has a MC=Q+30 replaces the Duopoly. What are the Monopoly Quantity and Price? Which quantities are bigger, Cournot or Monopoly? What is the Consumer Surplus in both cases? Set-up the Oligopoly model in a game theoretical prisoner's dilemma framework. Explain briefly the strategies and how you reach the Nash Equilibrium.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter15: Imperfect Competition

Section: Chapter Questions

Problem 15.1P

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