Determine the best response functions of the firm, Business Economics

1. Consider the market where there is product differentiation with two firms. The firms are choosing prices p1 and p2 and have demands given by

q1 = 40 - 0.5 p1 + p2

q2 = 60 - 2 p2 + p1

a) Assuming zero marginal and zero fixed costs, what are the firms' best response functions, that is best price of firm 1 given price of firm 2, and best price of firm 2 given price of firm one.

Posted Date: 3/28/2013 3:47:40 AM | Location : United States







Related Discussions:- Determine the best response functions of the firm, Assignment Help, Ask Question on Determine the best response functions of the firm, Get Answer, Expert's Help, Determine the best response functions of the firm Discussions

Write discussion on Determine the best response functions of the firm
Your posts are moderated
Related Questions
Bonjour, Veuillez SVP me donner un modèle d''un projet. Merci

Consider a Cournot duopoly. The market demand is p=190-q1-q2. Firm 1's marginal cost is 40, and firm 2's marginal cost is also 40. There are no fixed costs. A.    Derive every fir

Financial engineering deals with the design of new assets. Draw the payoff (at t=1) of the following bull butterfly spread: Purchase 1 call with exercise price a Sell 2 calls

demand and supply curve for luxury goods

QUESTION (a) With reference to price elasticity of demand, discuss and illustrate the effects on government revenue of increasing value added tax on goods and services. (b)

The amount of a good or service that a consumer is willing and able to buy at each particular price

An underwriter guarantees to increase a fixed amount of capital through an initial public offering (IPO).

If nominal GNP enhances at a rate of 10 per cent per year whereas the GNP deflator enhances at 8 per cent per year then show how much real GNP rises. Explain?

Explain about the term underemployment and unemployment rate. Discouraged employees are non-working people who are able of working although are not actively in search of a job.

If the Government decreases the interest rates on capital goods such as new plant and equipment and building. Investment also include spending on working capital such as stocks of