Explain how, in the Cournot model, the output of one firm depends on the output of other firms. Specifically, in Figure, what will be the output of Artesia if Utopia produces 32 units? If Utopia produces 48? If Utopia produces 64?
Answer to relevant QuestionsStarting from the Cournot equilibrium in Figure, suppose that the marginal and average total cost curves (which are the same for both firms) shift downward. Explain how the firms adjust to a new Cournot equilibrium.Consider the dominant firm model and treat OPEC as the dominant firm. Explain how OPEC would determine the price of oil and the level of output produced by the cartel. How would OPEC’s price and output be affected by new ...“There is no general theory of oligopoly.” Explain this statement.What is a prisoner’s dilemma game? Why is it relevant in evaluating the likelihood of cheating in a cartel?If there is asymmetric information between the owners of a baseball team for which a given player plays and other teams’ owners, would you predict that players who opt to become free agents and end up getting traded to ...
Post your question