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

question #Minimum 100 words accepted#History of cobweb theory

Why is it so difficult for government to achieve all macro objectives simultaneously? Specifically showing possible trade-offs i.e. a) Stimulatory policies which enhance AD

Problem 1: a. Describe the concept of opportunity cost, using the production possibility curve. b. What are the fundamental problems of an economy? Describe how the command

Calculate the cross-price elasticity of demand between computers and printers, where a 10 percent decrease in the price of computers results in a 15 percent increase in the quantit

TAKE A HYPOTHETICAL ECOMOMY AND CONSTRUCT THE CONSUMPTION SCHUDEL CONTAIN 10 PAIR OF HYPOTHETICAL VALUE OF AGGERGET INCOME AND CONSUMPTOIN

Protection of infant firms: Infant industries are those firms, which are young. The absence of economies of scale to them makes their unit cost of production higher than older

how do minimum units cost change with changes in fixed cost

A firms total cost function is TC=0.0006*X^3-0.086*X^2+4.8*X+25 and its total revenue function is TR=2.5*X find its profit function

composite supply v/s joint supply