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Please help me with the following Part 4 Suppose the two firms set their prices in accordance with the Bertrand model with zero conjecturel variation
Please help me with the following
Part 4 Suppose the two firms set their prices in accordance with the Bertrand model with zero conjecturel variation assumption b ) Derive the reaction function of the two firms Part 5 Determine the prices, the output and profits of the two producers Suppose barriers to entry are zero, and threatened competition from new entrants forces the two producers to set prices that would apply under perfect competition a) What prices will both producers charge for television sets What are the quantities sold at the perfectly competitive equilibrium and how much profit C) will be made? Comment and compare the price quantities and profits under joint profit maximization, the Cournot equilibrium, the Bertrand and the perfectly competitive market equilibrium. Part 6 Firm A is an established producer of smartphones whilst Firm B produces to a different market and is also considering a diversification strategy that involves entry into Firm A's market. Faced with the entry threat from Firm B, Firm A must decide whether to accommodate B's presence by cutting back its own output in the event that Firm B does enter, or plan to fight a price war with Firm B. If Firm B does not enter, Firm A earns a profit of R500 and Firm B a profit of R300. If Firm B enters and Firm A decides to accommodate, Firm A earns R200 and firm B earns R600. If A decides to fight firm B in a price war, both firms earn profit of R100. a) If Firm A and Firm B decides their strategy simultaneously, identify pure strategy Nash equilibrium of this game b ) Suppose A can observe Firm B's decision as to whether to enter or not. Before Firm A takes the decision to accommodate or fight. Write down the extensive form representation of the sequential game C) Is there a first mover advantage or second mover advantage in the sequential game? As in the prescribed book, we use the comma (,) to separate thousands, and the full stop (.) as a decimal point. ANSWER THE QUESTIONS AS DIRECTLY AS POSSIBLE AND EXPLAIN YOUR ANSWERS ALL WORKINGS MUST BE SHOWN OTHERWISE, FULL MARKS WILL NOT BE AWARDEDStep by Step Solution
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