Cournot duopoly model, Econometrics

Assignment Help:

i) Briefly distinguish between the Cournot duopoly model and that of Stackelberg.    

ii) Suppose the  inverse  market demand curve for  a telecommunications equipment is P = 100 - 2Q. Suppose there are two firms with constant marginal cost $4. Assuming they behave as Cournot duopolists, what will be the price and total industry output?

iii)  The inverse market demand curve for a Stackelberg leader and follower is given by  P =  30  - Q. If each has a marginal cost of $2, what will be the equilibrium quantity and price for each producer?

iv) Two firms, A and B, are operating in the US market  industry under duopolistic condition and choose to either produce at "High" price or a "Low" price. Suppose you are the manager of  firm A and you are required to advise the Board of Directors about the following strategic options:

1252_Cournot duopoly model.png

a.  If Firm B chooses High Price, what is Firm A's best strategy and why? 

b.  If Firm A chooses Low Price, what is Firm B's best strategy and why?

c.  What is the Nash equilibrium? Explain.

d.  What measures could you adopt to convince Firm B that you will abide to the agreement?

e.  Suppose that both firms produce at "Low" price and each firm make a loss of 16.


Related Discussions:- Cournot duopoly model

Nonlinear specification and dummy variables, Suppose you have a model of ca...

Suppose you have a model of capital investment by a U.S. rm. Imagine that yt, x1t and x2t are annual measures of investment, lagged pro t, and lagged capital stock, all in real do

What do you understand by non-linear models, Question: (a) Formulate a ...

Question: (a) Formulate a VAR with 4 lags and also rewrite it in matrix form, mentioning the limitations of such models. (b) What is the rationale behind introducing lag-dep

Calculate the after-tax operating cash flows, Your firm will produce widget...

Your firm will produce widgets for the next 10 years (starting at t=1). Annual revenue from selling widgets is $20,000. Production requires an initial outlay (at t=0) for machin

Calculate the slope of a line, Give the mathematical formula of calculate t...

Give the mathematical formula of calculate the slope of a line?

Goal for development, How can a person achieve his goal for development?Exp...

How can a person achieve his goal for development?Explain it with 5 examples.

Regression Analysis, #qu3. People educational achievement is affected, amon...

#qu3. People educational achievement is affected, among other factors, by the demographic characteristics of their households; the following multiple regression model was estimated

Quantity theory of money , Suppose an economy has the following Real money ...

Suppose an economy has the following Real money demand Function: L(Y,i) = 1000 + 0.3Y - 4000i, where   i is the nominal interest rate paid on non-monetary (financial) assets,

Equation prove, prove that summation k =0 and summation kxi=1

prove that summation k =0 and summation kxi=1

Multicollinearity, if there is multicollinearity so why we can not estimate...

if there is multicollinearity so why we can not estimate the value of parameters?

Write Your Message!

Captcha
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!

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