User Account

All Pages

Total cost function of the form

Assignment Help Business Economics
Reference no: EM132445892

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.

  1. If the 2 duopolists behave as independent, symmetric Cournotduopolists, 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. 
  2. 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.
  3. 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.  Find the Nash equilibrium for the game.  Explain.
  4. Explain how your payoff matrix represents a prisoner's dilemma.

Reference no: EM132445892

Questions Cloud

Marginal social cost for fish from pond : Suppose that fishermen have unlimited access to a pond of fish. The market for fish is competitive, so fishermen take the price as given.
Explain the concept of price rigidity in an oligopoly : Explain the concept of price rigidity in an oligopoly. Why might an oligopolist be wary of raising its prices?
Payoff matrix for two firms competing on prices : Explain why both firms might choose to sell at the low price, even though they earn higher profits when they both sell at the high price.
How does my contraband demonstrate romanticism : How does "My Contraband" demonstrate Feminist Consciousness?How does "My Contraband" demonstrate Double Consciousness?
Total cost function of the form : 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.
Identify and briefly chosen clinical issue of interest : Identify and briefly describe your chosen clinical issue of interest. Describe how you used keywords to search on your chosen clinical issue of interest.
Difference between the terms non rival and nonexclusive : Define and explain the difference between the terms "non rival" and "nonexclusive". Which of these properties is likely to result in a free-rider problem?
What will be the dollar balances in the accounts receivable : The current unadjusted Allowance for Uncollectable Accounts balance is a credit balance of $2,500. What will be the dollar balances in the Accounts Receivable
What are excess reserves : a. What are excess reserves? b. How can reserves be converted into faster money growth?

Reviews

Write a Review

Business Economics Questions & Answers

  Identify market failure that plays an important role

Identify a market failure that plays an important role in a movie, novel, short story, TV show, or song. Explain what the market failure is and how it is presented in the source. For example, one of my favorite movies is "Open Range," a western starr..

  Comparative advantage in producing apples

Which country has a comparative advantage in producing apples when comparing to all other countries?

  Study recent trends in the money supply

Use the Fred database at the federal reserve bank of st. louis to study recent trends in the money supply. Select the data series for demand deposits at commercial banks, either seasonally adjusted or not. View the chart and identify what patterns or..

  Determining the making decisions

Making Decisions-Assume that the following variables contain the values shown:

  Slightly ambiguous language contained in the agreement

Discuss a situation in which both parties entering into a contract could benefit from slightly ambiguous language contained in the agreement.

  Discuss each price rise reflected a reduction of silver coin

It has been claimed by a well-known papyrologist that during the 4th century the rise of prices in Egypt was a consequence of the debasement of the currency: each price rise reflected a reduction of the silver in the coins. Discuss critically.

  Which country''s gdp is higher? why?

Which country's GDP is higher? Why?

  Effects of an increase in the minimum wage

1) How are scarcity, choice, and opportunity cost related? 2) What are the effects of an increase in the minimum wage in the U.S. economy? Who would be most affected? 3) Why is elasticity of demand greater for goods that are a large share of a consum..

  About the price elasticity of cakes for me to be right

My family in Portugal runs a “cakery” (it’s like a bakery where they only sell cakes). Since I care about my aunts making more money (faster), I keep telling them to raise cake prices. My aunts, on the other hand, tell me raising prices is a sure way..

  Discuss whether that combination leads to more or less grow

Extend this comparison by choosing a different point on this period's PPF and discuss whether that combination leads to more or less growth over the next period.

  Damaging consequences of rising unemployment

Compare and contrast the damaging consequences of rising unemployment versus rising inflation? Be sure to define unemployment and inflation and explain how they are measured. Is one worse than the other? 600 words eassy

  What are efficiency-producer surplus-worker surplus

What are efficiency, producer surplus, worker surplus, and total gains from trade? Why would we expect regional wage levels to converge? What happens to total gains from trade as regional wages converge? How do payroll taxes affect labor markets (i.e..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd