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Part A

emand for Q is Q = 180 - P, where P is price. Suppose company A produces Q_A = 45 and company B produces Q_B = 24. If each company has a total cost of 15Q_i, where Q_i is the company's output choice, then company A earns profit _____ and B earns profit _____.

Group of answer choices

A)4,133; 2,304

B)4,133; 2,555

C)4,320; 2,555

D)4,320; 2,304

Part B) In a market for used laptops, buyers value good ones at $750 and value bad ones at $450, while sellers value good ones at $625 and bad ones at $410. Assume buyers cannot observe type, but believe that fraction 0.65 are type good, while the rest are bad. In this case, the most the buyer is willing to pay is _____ and this _____ cause market failure, where one type does not trade.

Group of answer choices

A)645; will

B)645; will not

C)620; will

D)620; will not

Two Cournot firms, A and B each produce good X, and demand is given to be X = 46 - P, where P is the price of good X. Assume that firm A has a total cost of 10X_A and that B has a total cost of 12X_B, where X_A is A's output choice and X_B is B's output choice. In this case, firm A's reaction function is

Group of answer choices

A)X_A = 12.5 - 0.5X_B

B)X_A = 18 - 0.5X_B

C)X_A = 24 - 0.5X_B

D)X_A = 22 - 0.5X_B

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