Two firms, A and B, compete in a market by choosing what price to charge. Consumers...

 

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Two firms, A and B, compete in a market by choosing what price to charge. Consumers only care about their prices, and will purchase from the cheapest firm. If they charge the same price, the quantity demanded will be equally split between the two firms. The market demand is given by QD (P) = 40 - 3P, where P is the lowest between the two firm's prices (PA, PB) The costs for each firm is 4 times the quantity they produce/sell: C(q) = 4. q for both firms For items (a)-(d), assume that both firms are charging $6, PA = PB = 6: a) What is the market quantity? [Select] b) What is the quantity sold by firm A? [Select] c) What is the quantity sold by firm B? d) What is firm A's profit? [Select ] [Select] Two firms, A and B, compete in a market by choosing what price to charge. Consumers only care about their prices, and will purchase from the cheapest firm. If they charge the same price, the quantity demanded will be equally split between the two firms. The market demand is given by QD (P) = 40 - 3P, where P is the lowest between the two firm's prices (PA, PB) The costs for each firm is 4 times the quantity they produce/sell: C(q) = 4. q for both firms For items (a)-(d), assume that both firms are charging $6, PA = PB = 6: a) What is the market quantity? [Select] b) What is the quantity sold by firm A? [Select] c) What is the quantity sold by firm B? d) What is firm A's profit? [Select ] [Select]

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Here are the answers to the questions a If both firms are charging 6 the market demand is 40 3 6 24 ... View the full answer