Determine what would the cournot equilibrium be

Reference no: EM13238348

Two Firms, CS Corp. and JL & Associates make identical goods and sell them in the same market. Market demand is given by Q = 1200 -P . Once a Firm has built capacity, it can produce up to its capacity each period with a marginal cost of MC = 0. Building a unit of capacity costs 240 (for both Firms). Once production occurs, price in the market adjusts to the level at which all production is sold. (In other words, these Firms engage in quantity competition, not price competition.)

a. IF CS knew that JL was going to build 100 units of capacity, how much would CS want to build? If CS knew that JL was going to build X units of capacity, how much would CS want to build?

b. IF CS and JL each had to decide how much capacity to build without knowing the other's capacity decision, what would the Cournot equilibrium be?

Reference no: EM13238348

Questions Cloud

Define what is the enthalpy of formation of c8h16o : A 1 g sample of C8H16O is burned completely in excess oxygen to yield CO2(g) and H2O(l) at 25 C, releasing 39.28 kJ of energy. What is the enthalpy of formation of C8H16O?

Determine the output and price under a cournot equilibrium : Consider a market for a homgeneous product with demand given by Q = 37.5 - .25P. There are two firms, each with a constant marginal cost equal to 40. a. Determine the output and price under a cournot equilibrium.

What is the single period cournot equilibrium : In a market with annual demand Q = 100 -P there are two firms, A and B, who make identical products. Marginal costs are constant and equal 10. There are no capacity constraints. a. What is the single period cournot equilibrium

Describe methane is an ideal gas : Assume that methane is an ideal gas, the specific heat capacity of water to be constant and equal to 4.184 J/g/K over this temperature range, and the density of water to be 1.0 g/cm3. The combustion of methane is given byCH4 + 2 O2 ? CO2 + 2 H2O ?..

Determine what would the cournot equilibrium be : Two Firms, CS Corp. and JL & Associates make identical goods and sell them in the same market. Market demand is given by Q = 1200 -P . Once a Firm has built capacity, it can produce up to its capacity each period with a marginal cost of MC

Calculate the amount of heat liberated : The standard enthalpy of formation of n-octane is -249.95 kJ/mol. Compute the amount of heat liberated when 3.58 g of n-octane is burned completely with excess oxygen to form carbon dioxide and liquid water.

Determine what is the irr for a small business : A small business owner estimates that the heat loss through the exterior walls of her warehouse will cost approximately $4,000 next year. A local company is offering insulation that can reduce the heat loss by 80%,

With what velocity did the mug leave the counter : In a local bar, a customer slides an empty beer mug down the counter for a refill, With what velocity did the mug leave the counter

Compute the final temperature of the mixture : Calculate the final temperature of the mixture, assuming no heat is lost. The heat capacities of Hg and H2O are 27.98 and 75.33 J/mol/K, respectively.

User Account

All Pages