Find the nash equilibrium and total quantity , Macroeconomics

Consider a model of Cournot competition as studied in class, with 2 firms and a linear inverse demand function P(Q) = a - Q (where Q = q1 + q2 is the total quantity produced by the two firms and a is a parameter). The firms have different
marginal costs: c1 for Firm 1 and c2 for Firm 2.
(a) Find the Nash equilibrium.

(b) Assume Firm 1's marginal cost is larger (c1 > c2). Which firm produces more in equilibrium? How do the quantities produced in equilibrium change if Firm 1 improves its technology, leading to a lower c1 (while c2 is unchanged)?

(c) Find the total quantity produced and each firm's profit in equilibrium. Describe what happens to these when Firm 1 changes its technology as above.

Posted Date: 3/20/2013 2:55:52 AM | Location : United States







Related Discussions:- Find the nash equilibrium and total quantity , Assignment Help, Ask Question on Find the nash equilibrium and total quantity , Get Answer, Expert's Help, Find the nash equilibrium and total quantity Discussions

Write discussion on Find the nash equilibrium and total quantity
Your posts are moderated
Related Questions
determinants of money supply

Gross domestic product Definition Perhaps the most significant concept in macroeconomics is Gross Domestic Product (GDP): Gross Domestic Product (GDP) is defined as the

Types of Taxes Which a Government can impose on the citizens are as follows: With the theory of taxation covered, we can now move towards the actual menu of the taxes the gover

Assume the United States has the following consumption information:                                     GDP = Income              Consumption

A recent study in NJ showed that 50% of all patients will return to the same dentist. Suppose nine patients are selected at random, what is the probability that: (a) exactly five o

Name the largest budget deficit country In 2009 Greece was eurozone country with largest budget deficit (about 16.0% of GDP), while Finland was the country with the smallest bu

While referring to the "EYE on YOUR LIFE" section on page 235 of the textbook, and the economic concepts you have accumulated during our course, consider the trade policies that se

why is international trade important south africa

#question.distinguish between economic growth and economic development.

Multiple Expansion We have seen that a single bank in a banking system can lend rupee for rupee with its excess reserves. What is the lending ability of the commercial banking