Suppose duopolists face the demand curve P (q) = 4-q firm one has costs c(q1)=2q1 and firm two has costs c(q2)=2q2 What is the optimal quantity if firm one moves first in a Stackelberg competition?

Imagine any market divided by 2 Cournot oligopolists who have identical costs Marginal cost = Average cost = 200. About this market, ask yourself: a) If the demand curve for this market is given by Q = 1250 - 2.5P, where Q is the total quantity demanded in the market and P is the selling price, both given in units, what is the reaction curve of the oligopolists? b) What will be the quantity produced and the selling price of the oligopolists? c) A strategist considers that a good marketing campaign would be able to expand the Demand of this market to Q = 1,500 - 2.5P and that in this way, oligopolists could produce the same amount and make significantly greater profits. Such a campaign would generate a reduction in profits in the order of 70,000. Is it worth making this investment in marketing?

A monopolist can produce at a constant average and marginal cost of ATC = MC = $5. It faces a market demand curve given by Q = 53 - P.    Suppose there are N firms in the industry, all with the same constant MC = $5. Find the Cournot equilibrium. How much will each firm produce, what will be the market price, and how much profit will each firm earn? Also show that as N becomes large, the market price approaches the price that would prevail under perfect competition. (Hint: your answers will be functions of N)(BONUS)

There are two firms selling differentiated products.  Firm A faces the following demand for his product:  QA=20-1/2PA+1/4PB Firm B faces the following demand: QB=220-1/2PB+1/4PA PA represents the price set by firm A. PB represents the price set by firm B.Assume that the marginal cost is zero both for firm A and firm B.What are the equilibrium prices of a simultaneous price competition?What would the equilibrium prices be if A is the leader and B is the follower?

Suppose the inverse demand function for two Cournot dupolists is given by P= 10 – (Q1+Q2) and their cost are zero.a) What is each firm marginal revenue?b) What are the reaction function for the two firmsc) What are the Cournot equilibrium outputd) What is the equilibrium price?

Consider a Cournot duopoly. The market demand function is P = 180 – 2(q₂ + q₂), where P is the market price, q₂ is the output produced by Firm 1 and q₂ is the output produced by Firm 2. The two firms have a constant marginal cost c = 30. What is the total output in this market? Round your answer to the nearest integer (e.g. 50)

Consider the following Stackelberg duopoly. Both firms produce a homogenous good. Firm 1 chooses how much to supply first. Firm 2 chooses how much to supply after observing the quantity supplied by firm 1. The market demand is Q= 100 – 4 P. For firm i, the total cost of production is TC(q) =5q,+2. What is the optimal quantity supplied by firm 12 10 20 30 40 QUESTION 6 Consider the following Stackelberg duopoly. Both produce a homogenous good. Firm 1 chooses how much to supply first. Firm 2 chooses how much to supply after observing the quantity supplied from firm 1. The market demand is Q= 100 - 4P. For firm i, the total cost of production is TC(q) =5q,+2. What is the market clearing price? O 10 O 15 20 O 25

You are a duopolist producer of a homogeneous good. Both you and your competitor have zero marginal costs. The market demand curve is P=24-Q where Q=Q₁ +Q₂. Q₁ is your output and Q₂ is your competitor's output. Your competitor has also read this book. Total revenue (TR) for your firm will be and total revenue for your competitor's firm will be In turn, marginal revenue (MR) for your firm will be and marginal revenue for your competitor's firm will be TR₁ = (24-Q₁-Q₂)Q₁ minus TR₂ = (24-Q₁-Q₂) Q₂. MR₁ = 24-2Q₁-Q₂ MR₂ = 24-Q₁-2Q₂- Suppose you will play this game only once. If you and your competitor must announce your outputs at the same time, how much will you choose to produce? (Enter all numeric responses rounded to two decimal places.) You will produce units of output. What do you expect your profit to be? Explain. Profit will be $, from Suppose you are told that you must announce your output before your competitor does. How much will you produce in this case, and how much do you…

Suppose a market is served by two firms (a duopoly). The market demand function given by P = 1200 - Q_{1} - Q_{2} where Q_{1} is the output produced by firm and Q_{2} is the output produced by firm 2 . Firm cost of production is given by the function C(Q_{t}) = 120Q_{t} and firm 2's cost of production is given by the function C(Q_{2}) = 120Q_{2} The average cost of firm 1 is given by A*C_{1} = 120 and the average cost of firm 2 is given by A*C_{2} = 120 Marginal profit function for firm 1: Delta pi 1 Delta Q 1 equiv1080-2Q 1 -Q 2; (d*pi_{2})/(Delta*Q_{2}) = 1080 - Q_{1} - 2Q_{2} Marginal profit function for firm 2: What will be the equilibrium profit levels earned by the Stackelberg leader firm and the Stackelberg follower firm?

(a) Firms A and B are Cournot duopolists producing a homogeneous good. The inverse market demand is given by P= 100 Q, where P is the market price and Q is the total quantity demanded. Each firm has marginal cost equal to 40 and there are no fixed costs. Calculate the total industry output in this market. Derive also (i) the market price, the total profit of the two firms and the consumer surplus. (ii) monopoly. Calculate the total industry output after the merger. Derive also the market price, profit and consumer surplus after the merger. Explain intuitively any changes in these variables if the merger occurs. Suppose the two firms propose to merge to become a