Reference no: EM131107716
A market is characterized by a demand curve that can be expressed as P = 96 – (1/3) Q. Each of the two identical firms currently serving the market has a total cost function of the form C = 12 q. There are no fixed costs.
a. If the 2 duopolists behave as independent, symmetric Cournot duopolists, what are the equilibrium price, quantity, and profits for each of the firms? Show work. If the 2 duopolists behave collusively, what are the equilibrium price, quantity, and profits for each of the firms? Show work.
b. Now create a payoff matrix in which the two firms are deciding between producing the Cournot duopoly quantity that you found in part a and producing the collusive quantity that you also found in part a. In other words, each firm has 2 strategies: produce the Cournot quantity and produce the collusive quantity. The payoffs for two cells in the matrix are the profits you calculated in part a.
c. Complete the other two cells in your payoff matrix; that is, find the profits for each of the firms when one of the firms produces the Cournot quantity and the other firm produces the collusive quantity. (You will need to calculate a new market price in order to find the profit payoffs for these two cells.) Show work.
d. Find the Nash equilibrium for the game. Explain. Explain how your payoff matrix represents a prisoner’s dilemma.
|
Should the dare program be discontinued
: Are there any other unintended consequences of the DARE Program that should be considered when the program is assessed? If so, what are they and why are they important to consider?
|
|
Availability of healthcare technology
: Your lectures in this course provided an overview of the history and development of U.S. healthcare since America became a nation. Trace the availability of healthcare technology to the American people from 1850 to the present day.
|
|
Characteristics of monopolistic competition
: Firms that operate in industries that have the characteristics of monopolistic competition of monopolistic competition advertise heavily just to get their brand names known and try to convince customers that their products are "unique" while the prod..
|
|
Awards ceremony to motivate staff
: Only T-Shirts, a large mall chain of retail stores wants to hold an awards ceremony to motivate staff and recognize their accomplishments.
|
|
Market is characterized by demand curve
: A market is characterized by a demand curve that can be expressed as P = 96 – (1/3) Q. Each of the two identical firms currently serving the market has a total cost function of the form C = 12 q. If the 2 duopolists behave as independent, symmetric C..
|
|
State the force of friction acting on the block
: Again state the force of friction acting on the block at the following times:t=0, t>0.
|
|
What do you think police can do to prevent, reduce
: What do you think police can do to prevent, reduce, and/or minimize the threat/impact of violence in schools?
|
|
What is the profit-maximizing quantity
: An electric power plant uses solid waste as its fuel for generating electricity. The total cost in dollars per hour of producing electricity is TC = 12+0.3D+0.27D2. The utility can sell electricity at a price per hour determined by p=15-0.2D. F5. Wha..
|
|
How much work does she do on the box of paper
: How much work does she do on the box of paper?
|