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
Why is investment so important in an economy? Define investment as an enhance in capital stock and link this to broad macro issues; future output, enhance in living standards, ta

What are the three approaches to measuring GDP? The three approaches are: a)  The production approach, b)  The spending approach and c)  The income approach.

Iso-quant: The dots in the above Figure denotes the various combinations of (L, K) that the producer can pick up from form to produce. Among these combinations, there can be t

related documents, photos,paper for permission from court etc.

what is direct utility in micro economics?

how to compute the price of a laptop increase of 20% and there is a 40% drop in the aquantity demanded

2ALBr3+3K2so4--->6KBr+1Al2(so4)3


China had to convert its yuan into dollars. Does that cause the dollar to appreciate or depreciate?

How do we evaluate the value of money? Supply and demand verifies the value of a currency. If demand is high, the value rises, and vice versa. Factors that affect supply and de