Find the nash equilibrium and total quantity , Macroeconomics

Assignment Help:

Consider a model of Cournot competition as studied in class, with 2 firms and a linear inverse demand function P(Q) = a - Q (where Q = q1 + q2 is the total quantity produced by the two firms and a is a parameter). The firms have different
marginal costs: c1 for Firm 1 and c2 for Firm 2.
(a) Find the Nash equilibrium.

(b) Assume Firm 1's marginal cost is larger (c1 > c2). Which firm produces more in equilibrium? How do the quantities produced in equilibrium change if Firm 1 improves its technology, leading to a lower c1 (while c2 is unchanged)?

(c) Find the total quantity produced and each firm's profit in equilibrium. Describe what happens to these when Firm 1 changes its technology as above.


Related Discussions:- Find the nash equilibrium and total quantity

Determinants of long run prosperity rank, he questions posed are broad and ...

he questions posed are broad and open ended so be careful to allow yourself enough research and planning time. If you are completely on top of the material delivered in class, then

What is quantitative easing, What is Quantitative easing Quantitative ...

What is Quantitative easing Quantitative easing (QE) is an unorthodox monetary policy which since 2009 has been intermittently pursued by Bank of England and US Federal Reserv

The Business Cycle, I would like to know one of the external determinants i...

I would like to know one of the external determinants in Spain''s recovery, please?

Comparative advantage in wheat, In The No-Trade Equilibrium Stormlands: W...

In The No-Trade Equilibrium Stormlands: WageL = 24 WageW = ? MPLL = 4 MPLW = ? PL = ? PW = 4 Reach: Wage*L = ? Wage*W = 6 MPL*L = ? MPL*W = 1 P*L = 3 P*W = ? (a) Which

Consumption and GDP, At first, it may seem obvious that consumption will re...

At first, it may seem obvious that consumption will rely on Y. If GDP is doubled in real terms over a number of years, government consumption, private consumption and investment wi

Differentiate between nominal rate and real interest rates, Differentiate b...

Differentiate between Nominal rate and real interest rates To distinguish the real interest rate from the "normal" interest rate, the latter is called the nominal interest rate

Net profit advertisement relationship, In 2009, ABC Company made $2M of net...

In 2009, ABC Company made $2M of net profit and spent $100,000 on advertisement. In 2010, it made $2.5M of net profit and spent $150,000 of advertisement. Based on this information

What is average cost in the producing output, What is average cost in the p...

What is average cost in the producing output? Average total cost , frequently considered as to simply average cost, is sum of total cost divided through quantity of output gen

Country club bills, Suppose the country club bills based on a sample of 4 m...

Suppose the country club bills based on a sample of 4 members are: 358, 958, 665, 846. What is the standard deviation for this sample of bills? (please round your answer to 1 decim

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