Find the cournot equilibrium quantity per firm and point

Assignment Help Business Economics

Reference no: EM131387957

Consider a duopoly facing an (inverse) market demand of p = 300 − 3Q. Firms produce a homogenous good at a constant marginal cost MC = 100.

a) Find the best response (or reaction function) of each firm. Illustrate the two curves on a graph.

b) Find the Cournot Equilibrium quantity per firm and point it on your graph.

c) Compute the equilibrium market output. Is that economically efficient? Explain.

Reference no: EM131387957

Questions Cloud

What is my opportunity cost : Suppose I want to open my own restaurant. Currently I am working as a financial Analyst at a top back earning $175,000 a year, which I will have to quit to open a restaurant. I AM also going to invest $100,000 of my savings which were earing an avera..

Federal reserve-increases the supply of money : When the U.S. central bank, the Federal Reserve, increases the supply of money:

What would happen to prices in market equilibrium : Suppose you can hire 10 workers for $12 each, but to hire the 1 worker you will have to pay all your workers $15 each. What is marginal cost of hiring the 11th worker. explain what would happen to prices in a market equilibrium if there is an increas..

What is necessary for business to become profitable : What is necessary for a business to become profitable?

Find the cournot equilibrium quantity per firm and point : Consider a duopoly facing an (inverse) market demand of p = 300 − 3Q. Firms produce a homogenous good at a constant marginal cost MC = 100. Find the best response (or reaction function) of each firm. Illustrate the two curves on a graph. Find the Cou..

Find the quantity and price in equilibrium : Suppose that the demand for a good is given by Qd = 1000 − 20p and that each unit can be produced at a cost of 8. Assuming this market is perfectly competitive, find the quantity and price in equilibrium.

What is the economically efficient output level : Suppose there are two types of consumers of a public good. There are 5 consumers with demand Q = 60 − p and 10 other consumers with demand Q = 100 − p. Assume that the marginal cost of the public good is equal to 200. What is the competitive market e..

Several units of homogeneous product as single package : A monopoly is considering selling several units of a homogeneous product as a single package. A typical consumer’s demand for the product is Qd = 40 - 0.5P, and the marginal cost of production is $50. Determine the optimal number of units to put in a..

Same constant marginal cost of production : Suppose there are two identical firms producing Kale Pops, Anvil and Bale. They both have the same constant marginal cost of production of $2 and face the market demand curve Qd= 100-P. Each firm knows everything about each other. What will the other..

User Account

All Pages