Tom is a monopolist input supplier to Dick and Harry. Tom's marginal cost is 1. Dick and

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Tom is a monopolist input supplier to Dick and Harry. Tom's marginal cost is 1. Dick and Harry are duopolists with production function q = x1/2 . No firm has fixed costs. The demand for the final product is given by Q = 100 - p.

a) Assume Dick and Harry buy the input from Tom at price k. What are their cost functions?

b) Find the Cournot equilibrium quantities.

c) What price, k, should Tom set?

Posted Date: Jun 12, 2024 09:06 AM

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Tom is a monopolist input supplier to Dick and Harry. Tom's marginal cost is 1. Dick and

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