What output is chosen in equilibrium

Assignment Help Business Economics

Reference no: EM13737805

The market demand curve is Q = 38 -P. There are two firms: firm1 and firm 2. One has MC=2 and the other has MC= 5. They choose outputs simultaneously (the cournot model).

A) Find an equation for 1's reaction curve

B) Find an equation for 2's reaction curve

C) Plot both curves on a diagram with firm 1's output on the horizontal axis and firm 2's ouput on the vertical axis.

D) What output is chosen in equilibrium

E) Calculate dwl in the Cournot model

F) Show the reaction curves when one firm has MC=3 and the other MC=10

Reference no: EM13737805

Questions Cloud

Required to recover the capital with the desired interest : An interest rate of 10% compounded continuously is desired on an investment of $15,000. How many years will be required to recover the capital with the desired interest if $2,030 is received each year?

The annual income from a rented home : The annual income from a rented home is $24,000. The annual expenses are $6000. If the house can be sold for $245,000 at the end of 10 years, how much could you afford to pay for it now, if you considered 9% to be a suitable rate?

Wickedly efficient widgets and wildly nepotistic widgets : Two firms, Wickedly Efficient Widgets (WEW) and Wildly Nepotistic Widgets (WNW), produce widgets with the same production function y =K^(1/2) L^(1/2), where K is the input of capital and L is the input of labor

Business experiences a sudden increase in its fixed costs : Suppose a business experiences a sudden increase in its fixed costs. For example, suppose property taxes increase dramatically. What impact, if any, will this have on the following?

What output is chosen in equilibrium : The market demand curve is Q = 38 -P. There are two firms: firm1 and firm 2. One has MC=2 and the other has MC= 5. They choose outputs simultaneously (the cournot model).What output is chosen in equilibrium

Analyze the influence of these four different measures : Foley’s advertising agency presents three social media options. For each of the social media options (Zwinktopia, Facebook, and YouTube) analyze the influence of these four different measures:

What is the future value of savings : Susan made 4 uniform annual deposits of $1800 in a savings account that earned an interest rate of 2% per year. Her last deposit was made 7 years ago. What is the future value of her savings 13 years from now, if she leaves the account untouched?

Federal trade commission and the department of justice : When companies in oligopolistic industries announce a proposed merger, it is often met with resistance from antitrust authorities (such as the Federal Trade Commission (FTC) and the Department of Justice (DOJ) in the U.S.). In the U.S., we have seen ..

Dynamic tensions manifest themselves in different ways : Do dynamic tensions manifest themselves in different ways depending whether the friendships are face-to-face or online? Are these tensions resolved differently in face-to-face and in social networking interactions?

User Account

All Pages