Monday, May 20, 2019

Oligopoly Problems

Oligopoly Problems (Note that second page has some partial answers so that you can check yourself. I think these are correct, but I did it quickly. So I result offer one bonus point per mistake for the first person who finds the mistake in my answers with a maximum of 3 points per student. ) 1) Demand is give by P=100-Q/2. Two pie-eyeds compete according to the Cournot pattern and individually has TC=10q. What profit does each fuddled earn?How would your answer change if the second firm observed the first firms decision (this is the Stackleberg problem)? 2) Demand is given by P=80-2Q. in that location are three identical firms each with TC=10. Find the profit of a firm if they each pick quantity simultaneously (Cournot). Find the Profit of a firm if the each pick impairment simultaneously (Bertrand). 3) Suppose there are n firms that compete according to the Cournot model and that each has MC = C. If demand is given by P=A-BQ, what profits result a firm earn?What would a car tel do? 4) Factory 1 has TC=20q +10 and Factory 2 has TC=10q. If two factories are operated by rivals who compete according to the Cournot model, what profits would each earn assuming that demand is given by P=180-Q? If this was one firm (a cartel) what would it do (hint if the one firm decided to operate some(prenominal) factories it would want MC to be the same at both locations or else it could increase profits my transmutation where it produced)? 5) Firm 1s demand is given by P=49-q1+0. 5q2 and Firm 2s demand is given by P=49-q2+0. 25q1. If TC=q2 +5 for each, what profit will each firm earn? What kinds of goods are the two firms selling? 1) q1=60 and q2=60 for Cournot while q1=90 and q2 = 45 for Stackleberg. 2) Under Cournot, q1= q2 = q3 =10. Under Bertrand, the firms will push price down to 0. 3) Each firm will produce q = (A-C)/B(n+1) under the Cournot solution. 4) In the competitive situation, q1=50 and q2= 60. 5) Each firm would make q=13. 07.

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