Question
Please answer 6a! thank you 6) The market for flat glass consists of two firms, 1 and 2, producing a homogeneous product. A recent study
Please answer 6a! thank you
6)
The market for flat glass consists of two firms, 1 and 2, producing a homogeneous product. A recent study has found the market demand faced by the two firms is: Q = 300 - P where Q = q1 + q2, with q1 (q2) being firm 1s (2s) quantity of output. Total costs are given by: Firm 1: TC1 = 50q1 Firm 2: TC2 = 100q2 Acting as Cournot competitors, find and graph the reaction functions of each firm (indicating appropriate horizontal- and vertical-axis intercepts). Determine the output and profit of each firm at the Cournot equilibrium.
6a) Lets go back to question #6 of the last homework, which involved firms 1 and 2 in the market for flat glass. Instead of behaving as Cournot competitors, imagine firm 1 is a Stackelberg leader, while firm 2 is a Stackelberg follower. Determine the Stackelberg output of each firm and the profit of each firm.
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