Combined profits in stackelberg vs simultaneous cournot

Assignment Help Business Economics

Reference no: EM13840302

The weekly demand for beer (by the keg, which is equivalent to 165 12-ounce bottles) in small, isolated Hoptown is:

P = 1000-2Q.

There is a duopoly of beer producers, Biller and Moors, who produce identical hoppy ales, and each have marginal costs of $100 per keg. Assume there are no fixed costs.

a. What are the best response curves in Cournot Oligopoly for these two producers?

b. What is the Nash equilibrium Q?

c. If Biller has the opportunity to be a Stackelberg leader and make its output decision before Moors, how much will each of the companies produce?

d. What is the difference in combined profits in the Stackelberg vs. simultaneous Cournot outcome?

Reference no: EM13840302

Questions Cloud

Show the profit-maximizing price and quantity : Show the profit-maximizing price and quantity. Show the producer and consumer surplus. Show the deadweight loss from monopoly. What is the implied competitive equilibrium? Is the firm operating at a profit or a loss (how do we know)? If it’s operatin..

Using the straight-line method : An asset is purchased for $745,000 today. It will have a $76,000 salvage value after 5 years of use. Using the straight-line (SLN) method, calculate the depreciation charge for year 2 and the book value at the end of year 2.

How much cash should one pay for it : A business is generating $1000 a month for the next 5 years at a nominal interest rate of 12% compounded monthly. How much cash should one pay for it?

Define the pharmacy tech certification test : The holding, the transfers, the modern rules and also the mail-order requirements. Use those outlines as being a roadmap to aid you study for the pharmacy tech certification test.

Combined profits in stackelberg vs simultaneous cournot : There is a duopoly of beer producers, Biller and Moors, who produce identical hoppy ales, and each have marginal costs of $100 per keg. Assume there are no fixed costs. What are the best response curves in Cournot Oligopoly for these two producers? W..

Essentials of strategic management class : Briefly define the bargaining power of suppliers and identify the buyers in this particular industry (What type of companies or individuals supply to this industry?). List the major underlying factors of this force (see chapter 3 of the textbook for ..

Fixed values for the saving rate and depreciation : Given the production function Y = A and fixed values for the saving rate and depreciation, if productivity is growing at an average rate of three percent, and the labor input grows at two percent, there is a unique growth rate of capital that is su..

Team leadership model : Team Leadership Model How does the team leadership model work? Have you experienced this model (or parts of it) in action? 150 words or less

What is the probability that the service was poor : A table classifying sample of 143 patrons of a restaurant according to type of meal and their rating of the service is shown below. Suppose we select, at random, one of the 143 patrons. Give that the meal was lunch, what is the probability that th..

User Account

All Pages