Joint equilibrium quantity, Microeconomics

The sole producer of the anti-diarrhea drug STOP supplies two retail pharmacies in an isolated village. The two pharmacies compete à la Cournot in a market characterized by an inverse demand function

 

                       P(Q)= 100-Q

where p  is the price consumers pay for a package of pills. The costs the pharmacies have per package sold are €40 plus the amount they have to pay for a package to the producer of STOP. Assume that the marginal cost of STOP is €12 per package and that there are no fixed costs. Moreover, suppose that STOP uses a two-part tariff with a price per package equal to S p and a fixed amount f  which both pharmacies require to pay to STOP to become its eligible suppliers.

 

a. Assume that the fixed amount f is so low that both retailers remain in the market. What is the joint equilibrium quantity of the two pharmacies that will be offered as a function of p ?

 

Posted Date: 3/28/2013 1:06:49 AM | Location : United States







Related Discussions:- Joint equilibrium quantity, Assignment Help, Ask Question on Joint equilibrium quantity, Get Answer, Expert's Help, Joint equilibrium quantity Discussions

Write discussion on Joint equilibrium quantity
Your posts are moderated
Related Questions
Q. Strength of the multiplier in microeconomics? Multiplier: An initial stimulus to spending (in form of new consumer, business or government purchases) generally results in a

Withdrawing MRTP Restrictions: The restriction on the scrutiny of an investment proposal that it does not violate the provisions of MRTP Act was withdrawn. This freed big bus

What barriers to economic growth can be explained using the Harrod-Domar model? Definition and outline of the Harrod-Domar model; growth in national income = savings ratio over


Q. What do you mean by Bond? Bond: A financial security that represents promise of its issuer (generally a company or a government) to repay a loan over a specified time period

The demand for every productive resources is a derived demand.  By derived demand it is meant that it is the output of the resource and not the resource itself for which is a deman

1. On Wednesday the 16 th , 2008 an enormous avalanche knocked out the lines that transmitted electricity from a hydroelectric dam to Juneau, Alaska. This eliminated Juneau's prima

How might an accurate value for the multiplier aid a government in setting fiscal policy? Any given multiplier will enhance national income at a given rate times enhance in gov


Structural Unemployment: This is unemployment resulting from changes in the pattern of demand for goods and services or changes in technology.These changes may in turn alter