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Consider a homogeneous good Cournot duopoly with linear inverse demand curve P(Q) = a - bQ. Suppose each firm i has constant marginal and average cost of production, ci.
(a) Derive the (Cournot) Nash equilibrium for all possible configurations of c1 and c2.
(b) Display a diagram in (c1,c2) space that indicates the cost combinations for which firm 2 will choose not to compete. Interpret the equation describing the boundary between the regions where firm 2 does and does not compete.
Analyze the three different money models (the ATM model of demand for cash, the liquidity-preference model, and the dynamic model of money) to determine which model seems most appropriate for explaining the way money works to someone.
Suppose that the government increases taxes and government purchases by equal amounts. What happens to the interest rate and investment in response to this balanced-budget change. Does your answer depend on the marginal propensity to consume.
A company consists of two kinds of employees, tall and short. Each person can work in either of two jobs, honest work or stealing from the company. The wage to honest work for a short person is wS, while the wage for a tall person is wT.
A factory benefits from discharging effluent, q, into a lake. The marginal benefit function is given by 60-2q. The pollution causes damages to two nearby communities. The marginal damages to Community A are 1q. The marginal damages to community B ..
What would be the effect if the rate is lowered to 4%, or raised to 9%? Why would the federal reserve change these rates?
Why do business departments have more money than other aepartments What economic measures can be taken to relieve the differences in salaries
How much substitutability do you suppose exists between inputs in winemaking? How might this factor affect efforts to cut costs?
In the absence of a quota, what is the equation for the total supply of wine? Show your work - what are the equilibrium price and quantity of wine? Show your work.
If the nominal GDP is $559 billion in the base year, and it rises to 577 in year 1, and 605 in year 2, what is the real GDP in each year, given that the price index has risen from 100 in the base year to 104.5 in Year 1 and up to 108.3 in Year 2?
Explain why market power leads to a deadweight loss. Is the total deadweight loss from market power for the economy large or small. A student argues, "If a monopolist finds a way of producing a good at lower cost, he will not lower his price. Becau..
Explain what could happen in the future with each of these trends below and come up with three(3) more trends not listed and do the same analysis for your three additions.
The demand for new homes in the United States is often described as highly cyclical and very sensitive to housing prices and interest rates.
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