Imagine a duopoly composed of Firm A and Firm B. The demand for the entire market...
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Imagine a duopoly composed of Firm A and Firm B. The demand for the entire market is given by Q = 120-5P. If the marginal cost for Firm A is $20 (MC, = 20) and the marginal cost for Firm B is $18 (MCB = 18). What are the total revenue functions for Firm A and Firm B? Support your answer with calculations. b) If firms choose quantities simultaneously, what are the best response functions for Firm A and Firm B if the marginal revenue for Firm A is MR, = 24-0.44,-0.2q and the marginal revenue for Firm B is MRg = 24-0.498 -0.29A. c) Based on your answers in the previous question, how much will each firm produce? d) Based on your answers in the previous question, compute the Cournot outcome (price and quantity) for the duopoly (that is, the market)? Imagine a duopoly composed of Firm A and Firm B. The demand for the entire market is given by Q = 120-5P. If the marginal cost for Firm A is $20 (MC, = 20) and the marginal cost for Firm B is $18 (MCB = 18). What are the total revenue functions for Firm A and Firm B? Support your answer with calculations. b) If firms choose quantities simultaneously, what are the best response functions for Firm A and Firm B if the marginal revenue for Firm A is MR, = 24-0.44,-0.2q and the marginal revenue for Firm B is MRg = 24-0.498 -0.29A. c) Based on your answers in the previous question, how much will each firm produce? d) Based on your answers in the previous question, compute the Cournot outcome (price and quantity) for the duopoly (that is, the market)?
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a 1205p P 247198 5 5 TRA Q41118 95 249A 98 9A9B 5 TRB 24 151 33 28 249A JA9B 2B 5 S 6 For the Best ... View the full answer
Related Book For
Managerial Economics and Business Strategy
ISBN: 978-0071267441
7th Edition
Authors: Michael R. baye
Posted Date:
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