Reference no: EM132461270
There are two firms in a market that produce an identical good. Firm 1 has a marginal cost of 8 and firm 2 has a marginal cost of 42. Fixed costs are zero for both firms. Suppose inverse demand for a product is P = 130 - Q.
Suppose that firm 1 produces 44 and firm 2 produces 16. Note that this implements the monopoly price in the related problem. What are profits for each firm?
If firms set quantities simultaneously (that is, play a Cournot game), what are best response functions. What quantities do they choose? What are profits?
If firm 1 knows firm 2 will play as in (a), what is firm 1's best response? What are profits in this case? If firm 2 knows firm 1 will play as in (a), what is firm 2's best response? What are profits in this case?
Suppose the firms meet infinitely often. They can save money at interest rate r. What interest rate is necessary to justify trigger strategies? You should solve for a separate interest rate for each firm.
Comparing this problem to the one in Assignment 2, is cheating more likely when firms are asymmetric? If so, is cheating more likely by the small firm or the large firm?
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What kind of activities and resources does your site provide
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What was the balance for prepaid insurance on the unadjusted
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Should Unilever divert money from its premium brands
: What price, product, promotion, and distribution strategy would allow Unilever to deliver value to low-income consumers without cannibalizing its own premium
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Discussion of a variety of poems
: Choose a poem from the list below. Read all of the poems before making your choice; do not simply choose the first one you read. If a poem has already been.
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Cheating more likely when firms are asymmetric
: Comparing this problem to the one in Assignment 2, is cheating more likely when firms are asymmetric? If so, is cheating more likely by the small firm
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Preparing the body of raos report
: Preparing the body of Rao's report, addressed to the board of directors, dated February 28, 2019, to accompany the 2018-2017 comparative financial statements
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What is the inverse demand function
: What is the inverse demand function? What are the best response functions? Write them in terms of Q1, Q2, MC1 and MC2.
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Technologies simplify and routinize the job of employees
: Can you give an example? Can the new technology also lead to greater variety and complexity?
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Prepare a contribution income statement for CWI
: Prepare a contribution income statement for CWI showing the contribution margin, controllable margin, and contribution by profit center
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