Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Jul 09, 2024

suppose there are two firms in an industry and they play Cournot. Suppose these firms are identical and face constant marginal cost and average cost

suppose there are two firms in an industry and they play Cournot. Suppose these firms are identical and face constant marginal cost and average cost of $0.50. The inverse demand is P(Q) = 50 - 1/2Q

i. what is the best response functions for firm 1? and firm 2?

ii. what does the response function represent?

iii. solve for the cournot equilibrium price and quantity?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

Step: 3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Elementary Statistics

Authors: Mario F. Triola

3rd Canadian Edition

032122597X, 978-0321225979

Students also viewed these Economics questions

Question

★★★★★

Affordable Electronics Inc. manufactures medium-quality, reasonably priced DVD players. The company uses standards to control its costs. The labour standards that have been set for one player are as...

Answered: 1 week ago

Question

★★★★★

What are some of the distinguishing features of third-force psychology?

Answered: 1 week ago

Question

★★★★★

McKinney & Co. estimates its uncollectible accounts as a percentage of credit sales. McKinney & Co. made credit sales of $1,500,000 in Year 1. McKinney & Co. estimates 2.5% of its sales will be...

Answered: 1 week ago

Question

★★★★★

Financial management. Please complete the question of a)b)c) and d) Merah Berhad current interest expense is RM2,000,000, operating income (EBIT) is and Earnings per share (EPS) is RM4.00. The...

Answered: 1 week ago

Question

★★★★★

In New South Wales Australia what is the recommended Professional Indemnity an Public Liability insurance for the conveyancing industry?

Answered: 1 week ago

Question

★★★★★

Suppose that there are only three types of consumers and consider a one period insurance choice problem in which there is only one health plan, and it offers full insurance. Expected cost to the...

Answered: 1 week ago

Question

★★★★★

DEF Sports Shoe Company has a Distribution facility in Cambridge Ontario, that imports basketball shoes from China for distribution to retailers across Canada DEF Sports was a small entrepreneurial...

Answered: 1 week ago

Question

★★★★★

Although Toby was usually too busy to see injured athletes from the local high schools, he agreed to look at Rodney's knee injury. Rodney was the son of the county prosecutor who was a good friend of...

Answered: 1 week ago

Question

★★★★★

The Accidental Bank Robbery Case Study 1. Identify the ethical issues 2. Define possible alternatives 3. Explain the ethics of each alternative 4. What are possible constraints of each alternative?...

Answered: 1 week ago

Question

★★★★★

Design and develop an organizational learning strategy Using the feedback that you received from CEO at the meeting as well as the information you researched and evaluated for your report, create...

Answered: 1 week ago

Previous Question Next Question