Can someone double check me? I have attached screen shots of my work.
From Exercise 8.2: The local cement market is a duopoly with City Cement and Mountain Cement producing quantities q and qm. Cement is a homogeneous product with the inverse demand function p = 20 - Q, where Q = q + qm. Each firm has a marginal cost of $4 and a fixed cost of $6. City Cement is a Stackelberg leader that sets output first. Mountain Cement acts as a follower. Mountain's best response to any output of City's is qm = 8 - q/2. Using the same data as in Spreadsheet Exercise 8.2, assume that City Cement is an incumbent monopoly and Mountain Cement is a potential entrant. City chooses an output level and then Mountain decides whether or not to enter the industry. Mountain can avoid paying fixed costs if it decides not to enter. Create a modified version of the spreadsheet used for Exercise 8.2 to determine what output City should produce now to maximize profit. Is entry blockaded, deterred, or accommodated? (Hint: Mountain does not enter if it will earn a negative profit. If it does not enter, its output is 0.) How would your answer change if fixed costs were 2 instead of 6?, ls entry deterred or accommodated? (Hint: Mountain does not enter if it wil earn a negative prot. If it does not qc q'\" 0 P TR\" TR'" \"0 "I" enter. its output is 0.) Type your answer (in this text box) below. 0 8 8 12 0 96 -10 86 2 7 9 11 22 77 12 67 EM is accommodated. 4 6 10 10 40 60 30 50 6 5 11 9 54 45 44 35 B 4 12 8 64 32 54 22 10 3 13 7 70 21 60 11 12 2 14 6 72 12 62 2 14 1 15 5 70 5 60 -5 16 0 16 4 64 0 54 -10 chmOM ' I: entry deterred or accommodated? (Hint: Mountain does not enter if it wil earn a negative prot. If it does not o 8 8 12 0 96 -6 90 enter. in output is 0.) Type your answer (In this text box) below. 2 7 9 11 22 77 16 71 Entryisacc ted. 4 6 10 10 40 60 34 54 6 5 11 9 54 45 48 39 8 4 12 8 64 32 58 26 10 3 13 7 70 21 64 15 12 2 14 6 72 12 66 6 14 1 15 5 70 5 64 -1 : 16 o 16 4 64 o 58 6