Find the quantities that firm is selling – equilibrium price, Game Theory

1. Two firms, producing an identical good, engage in price competition. The cost functions are c1 (y1) = 1:17y1 and c2 (y2) = 1:19y2, correspondingly. The demand function is D (p) = 800 50p. The firm that charges the lowest price gets the entire demand, while, if prices are equal, each firm gets exactly one half of the total demand. Firms can only charge prices that correspond to denominations of Canadian dollars (i.e., prices change by one cent).

(a) Suggest an equilibrium pricing scenario (i.e., one price per firm). Given the prices you propose, find the quantities that each firm is selling, the total market quantity, and the corresponding profits. Justify why the prices you propose are equilibrium prices (by showing that NO firm wants to deviate from the prices you propose).

(b) Repeat part

(a) assuming that the Canadian economy run out of 1 cent and 5 cent coins (i.e., prices can change only in multiples of twenty-five cents).

Posted Date: 3/22/2013 6:39:00 AM | Location : United States







Related Discussions:- Find the quantities that firm is selling – equilibrium price, Assignment Help, Ask Question on Find the quantities that firm is selling – equilibrium price, Get Answer, Expert's Help, Find the quantities that firm is selling – equilibrium price Discussions

Write discussion on Find the quantities that firm is selling – equilibrium price
Your posts are moderated
Related Questions
Matches or different objects are organized in 2 or a lot of piles. Players alternate removing some or all of the matches from anyone pile. The player to get rid of the last match w


Problem: Consider a (simplified) game played between a pitcher (who chooses between throwing a fastball or a curve) and a batter (who chooses which pitch to expect). The batter ha

A strategy consisting of potential moves and a chance distribution (collection of weights) that corresponds to how frequently every move is to be played. A player would solely use

Consider two identical firms, for each firm, the total cost of producing q units of output is C(q)=0.5q^2. The price is determined as P(q1,q2)- a-q1-q2. Estimate Cournots outcome;

can i analyse all games under trigger strategies or it''s possible just for prisoners dilemma?

QUESTION ONE. (a) The probability that, a bomber hits a target on a bombing mission is 0.70 Three bombers are sent to bomb a particular target. (i)  What is the probabilit

Something in a very game is Mutual information if all players realize it. A seemingly straightforward concept, mutual information is insufficient to research most games, since it's

One charm of evolutionary game theory is that it permits for relaxation of the normal fully-informed rational actor assumption. People, or agents, are assumed to be myopic, within

Rollback (often referred to as backward induction) is an iterative method for solving finite in depth kind or sequential games. First, one determines the optimal strategy of the pl