Duopoly in the production of mineral spring water.

Reference no: EM13693906

1. Suppose we have a duopoly in the production of mineral spring water. Each firm has the same cost structure where MC(Q) = 10. The market demand for mineral spring water is given by:

P = 70 - Q/50

Each firm, wishing to maximize profits, assumes that the other firm will not change his current level of production. What will be the final level of production for the market (after a Cournot equilibrium is reached)? How much is produced by each firm? How much profit is earned by each firm?

2. If we had efficiency in the duopoly described in question above, what would the market quantity and price be? How does this compare to your answer for the question above?

Reference no: EM13693906

Questions Cloud

Should government subsidize internet access for the poor : Should government subsidize internet access for the poor? Explain, making a reference to the benefits and to the problems that could be expected.

Comparative advantage will benefit all people : “Comparative advantage will benefit all people because everyone has a comparative advantage in something. Therefore, trade based on comparative advantage should be facilitated without undue government intervention”

Construct a choice table for interest rates : The South End bookstore has an annual profit of $170,000. The owner is considering opening a second bookstore on the north side of the campus. He can lease an existing building for 5 years with option to continue the lease for a second 5-year period.

A description of the initial equilibrium point : Illustrate and discuss the adjustment mechanism in a perfectly competitive market when there is an increase in demand. Assume that the market is in equilibrium and then some external factor changes that causes demand to increase.

Duopoly in the production of mineral spring water. : Suppose we have a duopoly in the production of mineral spring water. Each firm has the same cost structure where MC(Q) = 10. The market demand for mineral spring water is given by:

External benefits of substance abuse treatment : About two-thirds of funding for substance abuse treatment comes from taxpayers. Are there external benefits of substance abuse treatment that warrant this level of public funding?

What were the firms total costs during the month : During the previous month, a firm produced 250 tablet devices at an average variable cost of $40 and at an average fixed cost of $10. What were the firm's total costs during the month?

All non neutral taxes are undesirable : All non neutral taxes are undesirable

What are some of the ramifications of our decisions : Should we treat capital investments differently or all the same? More specifically should we encourage certain types of capital investments? Why? What are some of the ramifications of our decisions?

User Account

All Pages