Question: you are given a cournot model with linear demand and identical firms where Q(P) = D-P TC(Q) = cQ D > c if there are

you are given a cournot model with linear demand and identical firms

where Q(P) = D-P

TC(Q) = cQ

D > c

if there are two firms, will they prefer a cournot quantity or half the monopoly quantity? show this in a 2x2 game matrix (be sure to show the profits when one firm chooses the monopoly and one chooses the cournot)

if D=6 and c=2 suppose a repeated game (indefinetly) with a discount factor b. what values of b will permit continued collusion?

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!

Would love to get some explanation on these questions! Thank you in advance! Repeated games and tacit collusion: Consider a Cournot model with linear demand and identical firms: Q(P) = D P and TC(Q)...

I 2) Repeated games and tacit collusion Consider the Cournot model with linear demand and identical firms that we derived in class. In this model, Q(P) = D - P and TC(Q) - cQ, with D > c. a) Suppose...

Consider now a Cournot model with linear demand and identical firms that is scaled by market size M. In this model, Q (P) = M(D P) and TC(Q) = cQ + F, with D = 6, c = 2, and F = 2. a) Compute how...

1. In a perfectly competitive market all firms and potential entrants are identical. Each has a total cost curve given by TC = 40q-q+.01q where q denotes the quantity of each firm. The market demand...

1. In this exercise, we examine the partial equilibrium model of a competitive market. Suppose we have a market with a linear demand function given by Q = 57500 p, where Q is the total amount...

.In this exercise, we examine the partial equilibrium model of a competitive market. Suppose we have a market with a linear demand function given by Q = 57500 p, where Q is the total amount exchanged...

In this exercise, we examine the partial equilibrium model of a competitive market. Suppose we have a market with a linear demand function given by Q = 57500 p, where Q is the total amount exchanged...

econ 6. Consider Baumol and Klevorick's model of rate of return regulation, with the added complication that revenue is uncertain. In particular, in addition to the usual assumptions of the model,...

solve the following... tutors please help this is a very complete question.. What is your understanding of the value of CDA in understanding the way we see the world, the way that the world is...

1) market with demand Q = 16p -2 issupplied by a monopoly with costs C(Q) = 6 +Q 2 /8 . Calculate the following for this monopoly firm: (i)Output. (ii)Price (iii)Profit 2) If monopolies are always...

Digital World is a retail store that sells cameras and photography supplies. The firms credit purchases and purchases returns and allowances transactions for June 2019 appear below, along with the...

The comparative balance sheet of Morgensen Educational Supply at December 31, 2015, reported the following: Morgensens transactions during 2015 included the following: Requirements 1. Prepare the...

Does the need for change come from inside or outside organizations? Explain your position.

Keener Company has had 1,000 shares of 7%, $100 par preferred stock and 40,000 shares of $5 stated LO 16.1 value common stock outstanding for the last 3 years. During that period, dividends paid...

McGrath Financial Corp. has a defined benefit pension plan. As of January 1, 2011, the following balances were computed for the pension plan: Deferred pension gain . . . . . . . . . . . . . . . . . ....

Concept Financial has a defined benefit pension plan for its employees. The following were the balances for the pension plan as of January 1, 2015: Annual Benefit Obligation...

Chaz Corporation has taxable income in 2017 of $312,000 for purposes of computing the 179 expense and acquired the following assets during the year: What is the maximum total depreciation expense...

During the 2001 baseball season, Barry Bonds, then a player with the San Francisco Giants, hit 73 home runs in one season, a new record that went beyond the 72 set by Mark McGwire in 2000. Mr. Bonds...

Among a group of 5 8 programmers, who know either Java or Python or both, 1 5 only know Java and 1 3 only know Python. What is the probability of randomly choosing a programmer who knows both...

11. Based on the following rules regarding the confidence we have in information in a communication context, find examples from your everyday life where the rules have relevance: (a) The spatial rule...

2. Describe a situation from your own everyday life where it is clear that the situation in its consequence becomes the way you define it.

5. What do we mean when we say that social facts are mental constructions? Explain this with an example from your own everyday life.