A homogeneous product duopoly faces a market demand function given by p = 300 - 3Q,where...
A homogeneous product duopoly faces a market demand function
given by p = 300 - 3Q,where Q = q1 + q2. Both firms have constant
marginal cost MC = 100. (part 2)
1a. What is the Bertrand equilibrium price and quantity in this
market?
1b. Suppose Firm 1 is the Stackelberg leader, what is the equilibrium price in this market if Firm 2 plays the follower in this duopoly market? What is the equilibrium quantity? How much does each firm produce?
1c. In the diagram below, illustrate the Cournot, Bertrand and Stackelberg equilibria in parts (b), (e) and (f). Calculate the consumer surplus in each equilibrium.
Graph:
Price for vertical axis, quantity for horizontal axis. Demand line
with a MC horizontal line.
Homework Answers
P=300-3Q
MC=100
1a) Equilibrium price and quantity:-
TR=P*Q
=300Q-3Q2
MR=300-6Q
MC=MR
100=300-6Q
6Q=300-100
Q=200/6
=33.33
Pruce :-
P=300-3Q
300-3*33.33
300-100
=200
1c) 
Add Answer to:
A homogeneous product duopoly faces a market demand function
given by p = 300 - 3Q,where...
A homogeneous product duopoly faces a market demand function given by p = 300 - 3Q,where...
A homogeneous product duopoly faces a market demand function given by p = 300 - 3Q,where Q = q1 + q2. Both firms have constant marginal cost MC = 100. 1a. Derive the equation of each firm's quantity reaction function. b. What are the Cournot equilibrium quantity and price in this market? How much does each firm produce? c. What would be the equilibrium price and quantity in this market if it were perfectly competitive? d. What would the equilibrium...
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