Question: please show the work Problem 3: [2|] pts] Farmer 1 and farmer 2 both produce apples. Each farmer simultaneously choose quantities of apples to produce,
please show the work
![please show the work Problem 3: [2|] pts] Farmer 1 and farmer](https://s3.amazonaws.com/si.experts.images/answers/2024/06/6678f00041ff4_7926678f00019e26.jpg)
Problem 3: [2|] pts] Farmer 1 and farmer 2 both produce apples. Each farmer simultaneously choose quantities of apples to produce, {11, q; 2 ID. Both farmers have the same marginal cost of production of 10. Suppose that if the farmers choose quantities of grlI qg, then the price is determined according to the following inverse demand function: 310131 q2. Therefore, the utility (prot) of farmer 1 is: misses} = {310 91 9(2):}: 1091. Similarly the utility (prot) of farmer 2 is: was) = {310 - ql who 10:12- Port o: [15' pier] Compute the best response functions for each farmer. What are the pure strategy Nash equilibria of this game? Port l1: f1 pier] Suppose now that farmer 1 has a technological disadvantage so that he can produce at most 50 apples. Farmer 2 however can produce any number of apples desired. Suppose that the demand and marginal costs remain the same as in part a. Compute the best response functions for each farmer. What are the pure strategy Nash equilibria of this game
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
