Q1 there are two firms in an business producing identical

Assignment Help Business Economics

Reference no: EM13352332

Q. 1. There are two firms in an business producing identical products. Market inverse demand curve is P(Q) = 1-Q where Q= q1+q2. Total charge functions for the two firms are TC(q1)= c1q1 and TC(q2)=c2q2
a) Obtain every firm's best response function
b) Discover cournot equilibrium
c) What profit would each firm beneath Cournot equilibrium?

2. Suppose a duopoly and let demand be specified by P=A-BQ. In accumulation both firms have same marginal cost c. Interaction between the two firms will be frequent infinite. Both firms play a grim trigger strategy: they conspire and play cooperative action upon that firms agreed as long as both firms always stick to the agreement. Nevertheless, if any firm should deviate from the conformity then they will revert to Nash equilibrium forever.
a) If firms conspire describe the profit of each firm?
b) Assume firms compete in quantities. If firm 1 deviates from collusion in one period, what is the profit of firm 1 in that period or in subsequent periods?
c) What condition must the discount factor satisfy for collusion to be sustained if the firms compete in quantities?
d) What condition must the discount factor satisfy for collusion to be sustained if the firms compete in prices?

Reference no: EM13352332

Questions Cloud

Q1 discuss the social security system current status and : q1. discuss the social security system current status and future outlook. be thorough and focus on the economic

Q1 throughout the inventory of bacterial genes present in : q1. throughout the inventory of bacterial genes present in the sargasso sea a research team concluded that at least

Q1 you are a monopolist suppose there are two types of : q.1. you are a monopolist. suppose there are two types of people who buy your product groups 1 and 2. their separate

Q1 the general public does not always use the terms : q1. the general public does not always use the terms hypothesis and theory in the similar manner that biologists do.

Q1 there are two firms in an business producing identical : q.1. there are two firms in an business producing identical products. market inverse demand curve is pq 1-q where q

Q1 the control center for body temperature regulation is in : q1. the control center for body temperature regulation is in a region of the brain known as the hypothalamus. while the

Q1 how various 1-kiloton bombs would need to be exploded to : q1. how various 1-kiloton bombs would need to be exploded to produce 3.86 x 1026 joules the amount of energy emitted by

Qmacro-economics is perhaps most divisive area of economics : q.macro-economics is perhaps most divisive area of economics when functionalized to political decision making also

Q1 a friend tells you she has swollen lymph nodes on the : q1. a friend tells you she has swollen lymph nodes on the left side of her neck. you notice that a bandage is covering

User Account

All Pages