Consider the global market for crude oil, consisting of Saudi Arabia, Iran, and the rest of...

 

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Consider the global market for crude oil, consisting of Saudi Arabia, Iran, and the rest of the world. Suppose that price-taking consumers in the rest of the world have demand for crude oil given by: P = 500 - YQ. Suppose that Saudi Arabia has marginal costs given by: P = 50 + XQ, And that Iran has marginal costs given by: P = 100+ 0.5Q. Assume that neither Iran nor Saudi Arabia has demand of their own. a. Suppose Saudi Arabia and Iran operate as a Cournot duopoly. For Y=0.75 and values LSA ND of X from 0.01 to 0.99: plot - on the y-axis on the x-axis. To this figure also plot "S LSA ㅍ LSA on the y-axis on the x-axis. b. Suppose Saudi Arabia and Iran operate as a Stackelberg duopoly in which Saudi Arabia is the leader and Iran is the follower. For Y=0.75 and values of X from 0.01 to LSA 0.99: plot-on the y-axis on the x-axis. To this figure also plot-on the y-axis on the x-axis. c. Compare the two sets of curves from a and b. Explain what you observe. d. Suppose Saudi Arabia and Iran operate as a Cournot duopoly. For X=0.25 and values LSA of Y from 0.01 to 1.49: plot - A on the y-axis on the x-axis. To this figure also plot on the y-axis on the x-axis. e. Suppose Saudi Arabia and Iran operate as a Stackelberg duopoly in which Saudi Arabia is the leader and Iran is the follower. For X=0.25 and values of Y from 0.01 to LSA 1.49: plot-mon the y-axis on the x-axis. To this figure also plot-on the y-axis LSA V on the x-axis. f. Compare the two sets of curves from d and e. Explain what you observe. Consider the global market for crude oil, consisting of Saudi Arabia, Iran, and the rest of the world. Suppose that price-taking consumers in the rest of the world have demand for crude oil given by: P = 500 - YQ. Suppose that Saudi Arabia has marginal costs given by: P = 50 + XQ, And that Iran has marginal costs given by: P = 100+ 0.5Q. Assume that neither Iran nor Saudi Arabia has demand of their own. a. Suppose Saudi Arabia and Iran operate as a Cournot duopoly. For Y=0.75 and values LSA ND of X from 0.01 to 0.99: plot - on the y-axis on the x-axis. To this figure also plot "S LSA ㅍ LSA on the y-axis on the x-axis. b. Suppose Saudi Arabia and Iran operate as a Stackelberg duopoly in which Saudi Arabia is the leader and Iran is the follower. For Y=0.75 and values of X from 0.01 to LSA 0.99: plot-on the y-axis on the x-axis. To this figure also plot-on the y-axis on the x-axis. c. Compare the two sets of curves from a and b. Explain what you observe. d. Suppose Saudi Arabia and Iran operate as a Cournot duopoly. For X=0.25 and values LSA of Y from 0.01 to 1.49: plot - A on the y-axis on the x-axis. To this figure also plot on the y-axis on the x-axis. e. Suppose Saudi Arabia and Iran operate as a Stackelberg duopoly in which Saudi Arabia is the leader and Iran is the follower. For X=0.25 and values of Y from 0.01 to LSA 1.49: plot-mon the y-axis on the x-axis. To this figure also plot-on the y-axis LSA V on the x-axis. f. Compare the two sets of curves from d and e. Explain what you observe.

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Here are the stepbystep workings for the Cournot and Stackelberg duopoly models a Cournot Duopoly Sa... View the full answer