Question: Explain why, at a Cournot equilibrium with two firms, neither firm would have any regret about its output choice after it observes the output choice

Explain why, at a Cournot equilibrium with two firms, neither firm would have any regret about its output choice after it observes the output choice of its rival.

Step by Step Solution

★★★★★

3.31 Rating (160 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

In a Cournot setting each firm chooses a level of output that maximi... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

846-B-E-D-S (2391).docx

120 KBs Word File

Students Have Also Explored These Related Economics Questions!

Business Application: Price Leadership in Differentiated Product Markets: We have considered how oligopolistic firms in a differentiated product market price output when the firms simultaneously...

The following diagram illustrates the reaction functions and isoprofit curves for a homogeneous-product duopoly in which each firm produces at constant marginal cost.a. If your rival produces 50...

Two firms produce luxury sheepskin auto seat covers, Western Where (WW) and B.B.B. Sheep (BBBS). Each firm has a cost function given by C (q) = 30q + 1.5q 2 The market demand for these seat covers is...

Section A: Short Answers and Definitions. 10 Questions will be in the Final Examination. Answer any FIVE questions. Each question is worth 4 marks each. Spend at least 60 minutes in this section. (20...

Please find the following question 6. Explain why, at a Cournot equilibrium with two firms, neither firm would have any regret about its output choice after it observes the output choice of its...

6. Explain why, at a Cournot equilibrium with two firms, neither firm would have any regret about its output choice after it observes the output choice of its rival. 7. What are the conditions that...

1. Explain why, at a Cournot equilibrium with two firms, neither firm would have any regret about its output choice after it observes the output choice of its rival.

D uopoly market. Let Q 1 be the output of the first firm and Q 2 be the output of the second firm. Market demand is now given by P = 500 - Q 1 - Q 2 . Assuming the second firm has the same cost as...

Ppp4 Correct answers only 1. In 2004 both firm I and firm 2 had a constant average cost of 2 per unit. They simultaneously chose output levels (Cournot competition) for the whole year at the end of...

Cournot and Betrand equilibria: 1. In the town of Middleofnowhere there are only two farmers and they are the only producers of milk. The local demand for milk is given by (P denotes price measured...

What information do T-bond and Eurodollar futures option quotes contain?

List three depreciation methods used for financial reporting.

The degree of total leverage can be used to measure the relationship between: Sales and EBIT EBIT and EPS PAT and EPS Sales and EPS

A project was awarded based on a competitive proposal. Management made a commitment that a few key team members would work on the project. When such assignments happen, they are: Bargaining...

A large city has nearly 500 restaurants, with new ones entering regularly as the population grows. The city decides to limit the number of restaurant licenses to 500. Which characteristics of this...

Why would high transaction costs or imperfect information tend to prevent price-taking behavior?

The UMUC Daily News reported that the color distribution for plain M&M's was: 40% brown, 20% yellow, 20% orange, 10% green, and 10% tan. Each piece of candy in a random sample of 100 plain M&M's was...

The investment banking firm of Einstein & Co. will use a dividend valuation model to appraise the shares of the Modern Physics Corporation, Dividends at the end of the current year will be $1.64. The...

When property is disposed of, what factors influence the amount of the deductible loss