In a Nash- Cournot equilibrium, does an oligopolistic firm produce at less than full capacity, at full capacity, or more than full capacity? Explain.
Answer to relevant QuestionsIn 2008, cruise ship lines announced they were increasing prices from $ 7 to $ 9 per person per day because of increased fuel costs. According to one analyst, fuel costs for Carnival Corporation’s 84-ship fleet jumped $ ...Firms 1 and 2 produce differentiated goods. Firm 1’s inverse demand function is p1 = 260 – 2q1 – q2, while Firm 2’s inverse demand function is p2 = 260 – 2q2 – q1. Each firm has a constant marginal cost of 20. ...In a monopolistically competitive market, the government applies a specific tax of $ 1 per unit of output. What happens to the profit of a typical firm in this market? Does the number of firms in the market rise or fall? Why?Modify Question 1.5 so that if Firm 1 chooses High and Firm 2 chooses Low (the upper right corner), Firm 1 receives 1 rather than 3. How does that change youranswer?Suppose that you and a friend play a “matching pennies” game in which each of you uncovers a penny. If both pennies show heads or both show tails, you keep both. If one shows heads and the other shows tails, your friend ...
Post your question