Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Two firms are competing on a market with demand P-47-3Q by simultaneously choosing what price to charge. Assume they can charge any real price

 

Two firms are competing on a market with demand P-47-3Q by simultaneously choosing what price to charge. Assume they can charge any real price (not just limited to integer numbers) Whoever charges the lowest price can capture the whole demand. If prices are the same, firm 1 captures the whole demand (and 2 does not sell anything) Firm 1 has a marginal cost equal to 5. Firm 2 has marginal cost equal to 8. What is the equilibrium price in this market? [Select ] If firm 2's marginal cost increased to 30, what would be the equilibrium price in this market? [Select]

Step by Step Solution

There are 3 Steps involved in it

Step: 1

To find the equilibrium price in the market we need to determine the price at which both firms have ... blur-text-image

Get Instant Access to Expert-Tailored Solutions

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

Step: 2

blur-text-image

Step: 3

blur-text-image

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

Smith and Roberson Business Law

Authors: Richard A. Mann, Barry S. Roberts

15th Edition

1285141903, 1285141903, 9781285141909, 978-0538473637

More Books

Students also viewed these Finance questions

Question

Explain the importance of staffing in business organisations

Answered: 1 week ago

Question

What are the types of forms of communication ?

Answered: 1 week ago

Question

Explain the process of MBO

Answered: 1 week ago