Only two firms, ABC and MNO, sell a particular product. The following table shows the demand...

 

Transcribed Image Text:

Only two firms, ABC and MNO, sell a particular product. The following table shows the demand curve for their product. Each firm has the same constant marginal cost of $4 and zero fixed cost. Price Quantity Demanded Total Revenue (Dollars per unit) (Units) (Dollars) 14 0 0 13 5 65 12 10 120 11 15 165 10 20 200 9 25 225 8 30 240 7 35 245 6 40 240 5 45 225 4 50 200 3 55 165 2 60 120 1 65 65 0 70 0 Refer to Table 17-4. How much less do each of these firms earn in the Nash equilibrium than if they jointly maximize profits? Only two firms, ABC and MNO, sell a particular product. The following table shows the demand curve for their product. Each firm has the same constant marginal cost of $4 and zero fixed cost. Price Quantity Demanded Total Revenue (Dollars per unit) (Units) (Dollars) 14 0 0 13 5 65 12 10 120 11 15 165 10 20 200 9 25 225 8 30 240 7 35 245 6 40 240 5 45 225 4 50 200 3 55 165 2 60 120 1 65 65 0 70 0 Refer to Table 17-4. How much less do each of these firms earn in the Nash equilibrium than if they jointly maximize profits?

Answer rating: 100% (QA)

To determine how much less each firm earns in the Nash equilibrium compared to if they jointly maximize profits we need to compare their profits in bo... View the full answer