3. Consider a market of two firms with demand given by P = 200 – Q....
3. Consider a market of two firms with demand given by P = 200 – Q. Each firm has a constant marginal cost of $20 and fixed costs of $2,000. Competition is characterized by making simultaneous profit-maximizing quantity decisions.
a. What will be an individual firm’s quantities and profits if n = 2? n = 3? n = 4? (Make sure to include fixed costs in your profit calculations.)
b. Assuming no changes to demand or cost structure, how many firms would you expect to exist in this market in the long-run?
c. Suppose that there were no fixed costs. Would your answer to part b change? Explain. (You do not need to make additional calculations. Think about what would happen to individual firm profits as more firms enter the market but there are no fixed costs.)
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3. Consider a market of two firms with demand given by P = 200 –
Q....
Can someone help with the problem below? Suppose two oligopolistic firms face a market (inverse) demand curve P(Y + Y2...
Can someone help with the problem below?
Suppose two oligopolistic firms face a market (inverse) demand curve P(Y + Y2) = 20 - (Y1 + Y). Both firms produce at constant marginal cost, but they are not symmetric: firm 1 has marginal cost 2 and firm 2 has marginal cost 4. For each of the following competitive situations below, compute: • The equilibrium price. • The equilibrium quantities produced by each firm. • The profits received by each firm. (a)...
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1.Consider an industry with only two firms that produce identical products. Each of the firms only incurs a fixed cost of $1000 to produce and marginal cost is 20. The market demand function is as follows: Q=q1+q2=400-P a. Assuming that the firms form a cartel, calculate the profit-maximizing quantity of output, price and profits b. If the firms choose to behave as in the Cournot model, what would be the profit- maximizing quantities of output, price and profits? c. if...
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Consider a perfectly competitive market with many identical firms. Each firm has a long-run marginal cost...
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Suppose a profit-maximizing monopolist faces a demand curve given by Q = 130 – P. a....
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PROBLEM #1 Consider a market with two firms that sell products that are identical. Su market dema...
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There are only two firms in an industry with demand curves q1 = 30 - P...
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pls answer as many qwuestions!! 1. A market has an inverse demand curve and four firms,...
pls
answer as many qwuestions!!
1. A market has an inverse demand curve and four firms, each of which has a constant marginal cost of. If the firms form a profit-maximizing cartel and agree to operate subject to the constraint that each firm will produce the same output level, how much does each firm produce? 2. Duopoly quantity-setting firms face the market demand curve. Each firm has a marginal cost of $60 per unit. a. What is the Nash-Cournot equilibrium?...
Can someone help with the problem below?
Suppose two oligopolistic firms face a market (inverse) demand curve P(Y + Y2) = 20 - (Y1 + Y). Both firms produce at constant marginal cost, but they are not symmetric: firm 1 has marginal cost 2 and firm 2 has marginal cost 4. For each of the following competitive situations below, compute: • The equilibrium price. • The equilibrium quantities produced by each firm. • The profits received by each firm. (a)...
6. There is a market characterized by a linear demand function given by Q = 18 - 2P. In this market there are two identical firms each with a linear cost function C(q) = 49 (a) Assume the equilibrium in this market is determined by a leader-follower dynamic where firms one enters first i.e. sets its quantify first), and firm two enters second. Find the quantities produced by each firm, and the market price. (b) Find the profits for each...
PROBLEM #1 Consider a market with two firms that sell products that are identical. Su market demand is as follows: P-56-Q , where Q measures the total output produced by both firms (that is, Q=q +q.) and qi and q, are the quantities produced by firm 1 and firm 2, respectively. The per-unit cost of production is $6 for each firm, and so the firm's cost functions are 6q, and 6q, respectively. Each firm seeks to maximize profits. The firms...
There are only two firms in an industry with demand curves q1 = 30 - P and q2 = 30 - P. Both have no fixed costs and each has a marginal cost of 10 per unit produced. If they behave as profit maximizing price takers, each produces 20 units and sells them at a price of 10 so that each firm makes zero economic profits. Suppose the two firms form a cartel. While firm 1 produces one-half of the...
pls
answer as many qwuestions!!
1. A market has an inverse demand curve and four firms, each of which has a constant marginal cost of. If the firms form a profit-maximizing cartel and agree to operate subject to the constraint that each firm will produce the same output level, how much does each firm produce? 2. Duopoly quantity-setting firms face the market demand curve. Each firm has a marginal cost of $60 per unit. a. What is the Nash-Cournot equilibrium?...
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