Question: . Suppose demand for a commodity is given by y = 100 p . There are only two possible factories that can produce this commodity,

. Suppose demand for a commodity is given by y = 100 p . There are only two possible factories that can produce this commodity, each with cost function: c_j= 50+ 2y_j, where j = 1, 2 denotes the factory. The total market output is the sum of the outputs from these two plants.

(a) Suppose the two firms form a cartel. Compute the profit maximizing total output, price, profits of the cartel in this situation

(b) Instead of a cartel, suppose the two plants are owned by Cournot duopolists. Find the CournotNash equilibrium output by each firm, the price, and the total profit.

(c) Instead of the Cournot assumption, suppose that firm 1 sets its output before firm 2 does. Firm 2 does observes the output choice of firm 1 before it makes its own output choice. Find the Stackelberg equilibrium output produced by each firm, the price, and total profit.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

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

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!

Suppose demand for a commodity is given by y = 100 p . There are only two possible factories that can produce this commodity, each with cost function: c j = 50+ 2y j , where j = 1, 2 denotes the...

Answers, thorough explanation..... Problem Set 4 Due in class on June 25 1. Question 1 (20 points) Suppose I prefer $20 for sure to a lottery that pays $100 with probability 1/4 and $0 with...

Solve the following attachments. Question 3: The Closed-Economy IS-LM-FE Framework (25 Marks) Consider the following closed economy: 0\"\" = 150 20m + 0.8(1' T) l" = 200 20m Government purchases, G...

need step by step explanations thank you Question 1. (16 marks) Consider a competitive market in which some firms are polluters. Firm A: C(x) = 20xx and the environmental cost to society is E(x,) =...

please help them. Question 1 again, Consider a competitive market for electricity production in which some firms are polluters. Firm A (coal burning): C(XA)= x] and the environmental cost to society...

Suppose that lithium-ion batteries are produced by three firms, one each in Countries A, B, and C. The firms are called Firm A, Firm, B, and Firm C, respectively. Each firm produces with a marginal...

Y5 2 (20 Points) The market demand curve for smoothies is given by q = 100 - - P, and the total cost function for any firm in the industry is given by TC(q) = 8q. A. (5 points) Suppose the smoothie...

Suppose that a price-searcher firm had a demand function for its product given by: OD: 100 - 20P. Find the marginal revenue function. Fill in the blank below. MR=5- Q (Note that the negative sign has...

The supply function ps(x) for a commodity gives the relation between the selling price and the number of units that manufacturers will produce at that price. For a higher price, manufacturers will...

Explain clearly. Problem 7.11. A financial institution has entered into a 10-year currency swap with company Y. Under the terms of the swap, the financial institution receives interest at 3% per...

June production generated the following activity in Auto Chassis Companys Work-in-Process Inventory account: June 1 balance ................ $ 20,000 Direct materials used ..............31,000 Direct...

* Incorrect. In the cross (or vector) product q = 1 F = -241+ -8.0 + 64k = -6.0 +2.0 +2.0k B = B + B + B What then is B in unit-vector notation if Bx = By? B = =qvx B we know that i 16 + i 16 ..t i 4...

Which of the following statements are correct? Under simple interest, the interest earned each year increases over time. Under simple interest, the total interest earned is proportional to the...

Describe how you would operationalize variables for experimental testing in the following research question: What are the performance differences between 10 microcomputers connected in a local-area...

Jackson Company had the following information for 2020: Common Stock Share transactions: 1/1: 100,000 shares of c/s issued and 7,000 shares t/s. 3/1 Purchased 2,000 shares of treasury stock 7/ 1:...

Answer via Blackboard according to timeframe on Assigment.. Can be answered in groups of up to 3 students Exercise 1: You own a portfolio of short to medium term corporate bonds. The different...

Summarize the main critique that legal positivism makes against natural law theory.

The local video store is planning a promotional give-away for its long-standing customers. If the customer has been a member for 12 months or more they will receive a coupon booklet allowing them to...

What do many organizations use to schedule and coordinate changes for information systems? Question 2 3 options: A . Impact analysis B . Backout plans C . Maintenance windows D . Version control

11. In what environment or contexts is it the value you want others to associate you with that the value can best be expressed in? Do you seek out these contexts to learn?

2. In this chapter, the reader should reflect on the following concepts: action strategies, values and criteria.

1. Too understand personal motivation.