Cournot Assume two firms 1 and 2. The inverse market demand function is given by: P=30-(q1+q2) Each firm produces with marginal costs of MC = 6 Fixed costs are zero. The next questions refer to the Cournot duopoly. Question 1 (1 point) Listen ReadSpeaker webReader: Listen Focus What is Firm 1's total revenue function? Question 1 options: TR1=30q1 -q1 -q22 TR1=30-2q1-q2 TR1=30q1 -q12-q2 None of the above. Question 2 (1 point) Listen ReadSpeaker webReader: Listen What is Firm 1's marginal revenue function? Question 2 options: MR1=30-2q1 -q2 MR1=30-q1-2q2 MR1=30-2q1-2q2 None of the above. Question 3 (1 point) Listen ReadSpeaker webReader: Listen What is Firm 1's response function? Question 3 options: q1=12-0.5q2 q1=12-q2 q1=12-2q2 None of the above Question 4 (1 point) Listen ReadSpeaker webReader: Listen If Firm 1 thinks that Firm 2 chooses to supply q2=10, then Firm 1's profit maximizing quantity would be q1*= Question 4 options: 6 7 8 10 Question 5 (1 point) Listen ReadSpeaker webReader: Listen If Firm 2 thinks that Firm 1 chooses to supply q1=7, then Firm 2's profit maximizing quantity would be q2*= Question 5 options: 6.5 7.5 8.5 9.5 Question 6 (1 point) Listen ReadSpeaker webReader: Listen In equilibrium, each firm will supply qi= Question 6 options: 5 6 7 8 Question 7 (1 point) Listen ReadSpeaker webReader: Listen The market price in equilibrium will be P*(q1+q2)= Question 7 options: 14 16 18 20 Question 8 (1 point) Listen ReadSpeaker webReader: Listen In equilibrium, each firm's total revenue is equal to TRi= Question 8 options: 106 108 110 112 Question 9 (1 point) Listen ReadSpeaker webReader: Listen In equilibrium, each firm's total variable cost is TVCi= Question 9 options: 8 16 32 48 Question 10 (1 point) Listen ReadSpeaker webReader: Listen In equilibrium, each firm's total profit is i= Question 10 options: 32 40 48 64 Question 11 (1 point) Listen ReadSpeaker webReader: Listen In equilibrium, total consumer surplus is CS= Question 11 options: 128 169 196 225 Question 12 (1 point) Listen ReadSpeaker webReader: Listen In equilibrium, total welfare is W= Question 12 options: 225 256 281 312 Stackelberg The next questions refer to the Stackelberg Leader Follower model. Assume Firm 1 is the leader. Question 13 (1 point) Listen ReadSpeaker webReader: Listen What is the leader's total revenue function? Question 13 options: TR1=42q1 -1.5q12 TR1 =30q1 -1.0q12 TR1 =18q1 -0.5q12 TR1=6q1-0.25q12 Question 14 (1 point) Listen ReadSpeaker webReader: Listen What is the leader's marginal revenue function? Question 14 options: MR1=6-0.5q1 MR1 =18-1q1 MR1 =30-2q1 MR1 =42-3q1 Question 15 (1 point) Listen ReadSpeaker webReader: Listen What is the leader's chosen optimum quantity q1*= Question 15 options: 6 9 12 15 Question 16 (1 point) Listen ReadSpeaker webReader: Listen What is the follower's s optimum quantity q2*= Question 16 options: 6 9 12 15 Question 17 (1 point) Listen ReadSpeaker webReader: Listen The market price in equilibrium will be P*(q1+q2)= Question 17 options: 12 14 16 18 Question 18 (1 point) Listen ReadSpeaker webReader: Listen In equilibrium, the leader's profit is 1= Question 18 options: 36 72 108 144 Question 19 (1 point) Listen ReadSpeaker webReader: Listen In equilibrium, the follower's profit is 2= Question 19 options: 36 72 108 144 Question 20 (1 point) Listen ReadSpeaker webReader: Listen In equilibrium, consumer surplus is CS= Question 20 options: 132 142 152 162 Question 21 (1 point) Listen ReadSpeaker webReader: Listen In equilibrium, total welfare is W= Question 21 options: 270 280 290 300 Cartel For the next questions assume that Firm 1 and Firm 2 form a cartel (thus acting together like a monopolist). Question 22 (1 point) Listen ReadSpeaker webReader: Listen What will be the cartel's marginal revenue function? (where Q=q1+q2) Question 22 options: MRC=30-Q MRC=30-2Q MRC=30-3Q MRC=30-4Q Question 23 (1 point) Listen ReadSpeaker webReader: Listen The cartel's profit maximizing price is PC*= Question 23 options: 6 12 14 18 Question 24 (1 point) Listen ReadSpeaker webReader: Listen The cartel's profit maximizing quantity is Q*= Question 24 options: 12 14 18 20 Question 25 (1 point) Listen ReadSpeaker webReader: Listen Consumer surplus under the cartel solution is CS = Question 25 options: 50 72 98 128 Question 26 (1 point) Listen ReadSpeaker webReader: Listen Total producer surplus (cartel rent) under the cartel solution is equal to PS = Question 26 options: 100 144 196 256 Question 27 (1 point) Listen ReadSpeaker webReader: Listen Total welfare under the cartel solution is equal to W= Question 27 options: 150 216 294 384 Bertrand The next questions refer to Bertrand competition. Question 28 (1 point) Listen ReadSpeaker webReader: Listen Betrand criticized the Cournot model. Bertrand's point of criticism was that firms cannot be assumed to compete through Question 28 options: quantities supplied qualities produced prices set product differentiation Question 29 (1 point) Listen ReadSpeaker webReader: Listen In equilibrium, Bertrand competition is equivalent to the model of Question 29 options: Monopolistic competition Perfect competition Unfair competition Ruinous competition Question 30 (1 point) Listen ReadSpeaker webReader: Listen Which statement is true? In equilibrium, Question 30 options: The cartel equilibrium price is highest The Stackelberg leader-follower equilibrium price is higher than the Cournot duopoly equilibrium price Both a. and b. are correct. None of the above is correct