N firms compete in a simultaneous Cournot game. Demand is Q = 100 - 2P. Marginal...
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N firms compete in a simultaneous Cournot game. Demand is Q = 100 - 2P. Marginal cost is $10 for all firms. Fixed cost is $5 for all firms. What are equilibrium quantities and profits for each firm if N=2? What are equilibrium quantities and profits for each firm if N=3? What are equilibrium quantities and profits for each firm as a function of N? Imagine that there are an infinite number of potential entrant firms. Consider a two-stage game where in stage 1, potential entrant firms decide whether or not to enter, and in stage 2, the actual entrant firms play a simultaneous Cournot game. If a potential entrant does not enter in stage 1, it earns zero profit. How many firms will actually enter in equilibrium? One way that businesses increase profits is to lobby politicians to set up regulations that deter entry of new firms. Imagine that N=2, and an "industry association" representing the two firms can pay politicians to pass a law that prohibits any entry by additional firms. In the absence of the law, the equilibrium in Question 3D would arise. What is the maximum amount that the industry association should be willing to pay politicians to pass the law? N firms compete in a simultaneous Cournot game. Demand is Q = 100 - 2P. Marginal cost is $10 for all firms. Fixed cost is $5 for all firms. What are equilibrium quantities and profits for each firm if N=2? What are equilibrium quantities and profits for each firm if N=3? What are equilibrium quantities and profits for each firm as a function of N? Imagine that there are an infinite number of potential entrant firms. Consider a two-stage game where in stage 1, potential entrant firms decide whether or not to enter, and in stage 2, the actual entrant firms play a simultaneous Cournot game. If a potential entrant does not enter in stage 1, it earns zero profit. How many firms will actually enter in equilibrium? One way that businesses increase profits is to lobby politicians to set up regulations that deter entry of new firms. Imagine that N=2, and an "industry association" representing the two firms can pay politicians to pass a law that prohibits any entry by additional firms. In the absence of the law, the equilibrium in Question 3D would arise. What is the maximum amount that the industry association should be willing to pay politicians to pass the law?
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Related Book For
Economics of Strategy
ISBN: 978-1118319185
6th edition
Authors: David Besanko, David Dranove, Mark Shanley, Scott Schaefer
Posted Date:
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