What is the market price level

Reference no: EM133336558

Question 1) Two large diversified consumer products firms are about to enter the market for a new pain reliever. The two firms are very similar in terms of their costs, strategic approach, and market outlook. Moreover, the firms have very similar individual demand curves so that each firm expects to sell one-half of the total market output at any given price. The market demand curve for the pain reliever is given as: Q = 2600 - 400P. Both firms have constant long-run average costs of $2.00 per bottle. Patent protection insures that the two firms will operate as a duopoly for the foreseeable future. Price and quantity values are stated in perbottle terms. If the firms act as Cournot duopolists, solve for the firm and market outputs and equilibrium prices.

Question 2) Hale's One Stop and Auto Service competes with Murray's Gas Mart. The local demand is:

Q
d
=25-10P⇔P=2.50-0.1Q
d

Both firms sell exactly the same quality of gasoline. Thus, if the firms charge a different price, the lower price firm will capture the entire market share. If the firms charge the same price, they will split the market share. The marginal cost functions are both constant at $1.25. If the firms compete by setting price, what is the market output level? What is the market price level?

Reference no: EM133336558

Questions Cloud

What would be effective employer branding strategies : HRM 324 University of Notre Dame What would be effective employer branding strategies to attract Gen-Z talent? What the characteristics of effective

Describe your work exprience achievements : Describe your work exprience achievements. Give examples of these accomplishments and the consequences of your work as a records officer.

How can philippines achieve its goal to be a middle income : Based on your research (like the briefer on the 2023 proposed national budget, macroeconomic parameters, debt to gdp ratio, and other relevant data)

Identify and uphold employee behaviours : Importance of policies and handbooks to identify and uphold employee behaviours?. How are policies used to support cause with termination

What is the market price level : The marginal cost functions are both constant at $1.25. If the firms compete by setting price, what is the market output level? What is the market price level?

Explain effects you believe internets capabilities : Explain the effects you believe the Internet's capabilities will have on Apple, Google and Coca-Cola and what the owner of the brand should do in light of them.

What information helped you most personally : CHDV C251 Bakersfield College Reflecting on the information throughout this semester, what information helped you most personally and professionally?

Does education create customers for programs : Does education create customers for its programs, should students be regarded as customers and what about credentialing and the more recent education trend

Why it is in the best interests of the nations health : HAPP 354 University of Maryland, Baltimore County make a persuasive case for why it is in the best interests of the nation's health.

User Account

All Pages