How much profit does each producer make

Assignment Help Business Economics

Reference no: EM131805642

Suppose two natural gas producers are competing in quality over the market demand given by the inverse demand function P(Q) = 120 - Q/2, where Q = Q_1 + Q_2. The producers' cost function are TC(Q_1) = 6 + 3/2 Q^2 _1 and TC(Q_2) = 4 + 2Q_2. (a) What output levels, Q_1 and Q_2, will the two firms produce? (b) What will be the market price per unit of natural gas? (c) What is the marginal cost of the last unit produced by producer 1? By producer 2? (d) How much profit does each producer make? (e) How much deadweight loss does the Cournot duopoly generate?

Reference no: EM131805642

Questions Cloud

Suppose there are two individuals and two goods : Suppose there are two individuals and two goods. The initial endowments are ?1 = (1, 0) and ?2 = (1, 1). Preferences are given by u1(x, y) = x + y and u2(x, y)

Initial endowment in the economy : Preferences are given by u1(x, y) = max{x, y} ad u2(x, y) = xy Suppose that the initial endowment in the economy is (10, 10)

What are the measurement units of the standard deviation : What does the standard deviation tell you about the relationship between individual data values and the average?

The accountant for mystic medical services consulting firm : The accountant for Mystic Medical services consulting firm, mistakenly omitted adjusting entries for

How much profit does each producer make : What will be the market price per unit of natural gas? (c) What is the marginal cost of the last unit produced by producer 1? By producer 2?

What are the measurement units of the variance : Which is the more easily interpreted variability measure, the standard deviation or the variance? Why?

What will be the market price per unit of natural gas : (a) What output levels, Q_1 and Q_2, will the two firms produce? (b) What will be the market price per unit of natural gas?

What was the cost of completing a unit during current period : What was the cost of completing a unit during the current period

Uncovered interest parity condition holds : Suppose the uncovered interest parity condition holds, and that the domestic interest rate is lower than the foreign interest rate.

User Account

All Pages