User Account

All Pages

Find out marginal cost for firms

Assignment Help Business Economics
Reference no: EM132639143

Suppose there are two firms producing spring water which is homogeneous; that is, consumers don't particularly like one over the other if the prices charged by the two firms are the same. Suppose consumers' demand can be characterized by this linear demand Q = 40 - 2P and the marginal cost for both firms are the same, i.e., mc = 6. Both firms chose prices at which they sell their eater simultaneously,

a. Suppose both firms can produce as many units as possible to meet consumers' demand, i.e., no capacity constraint. Please derive both firms' demand functions given prices p1 and p2.

b. Suppose both firms can produce as many units as possible to meet consumers' demand, i.e., no capacity constraint. Please derive both firms' best response functions

c. What are the equilibrium prices, (p ∗ 1 , p∗ 2 ).

d. If each firm has a capacity constraint ¯q = 20, discuss whether a strategy profile (p1 = 6, p2 = 6) is a Nash Equilibrium or not?

e. If each firm has a capacity ¯q = 10, meaning the maximal units that a firm can produce is 10, is strategy profile (p1 = 10, p2 = 10) a Nash Equilibrium or not?

Reference no: EM132639143

Questions Cloud

What should know about travelling to the country on business : What considerations are important when pricing my products for sale in the country? What should know about travelling to the country on business?
Describe each ethical point in the code of ethics : Describe each ethical point in the Code of Ethics. You may use a free screen capture site such as Screencast-O-Matic to record a video of your presentation.
What should the adjusting journal entry be to correct : Prepaid rent has a balance of $6,000 that was paid on July 1st for 6 months of rent. What should the adjusting journal entry be to correct prepaid rent balance
Effect on the person consumption of cigarettes : Would the combined measures be likely to have any effect on the person's consumption of cigarettes? Why or why not?
Find out marginal cost for firms : Suppose there are two firms producing spring water which is homogeneous; that is, consumers don't particularly
Explain various elements of the new patient intake packet : Create a 10-slide PowerPoint presentation that explains the various elements of the new patient intake packet. (Here is a library resource for help creating.
What are the key issues currently facing country government : What would be involved in setting up a company in the country? What are the key issues currently facing the country's government?
Compute the amount of cash to be invested by partner : Compute the amount of cash to be invested by partner Me and the total capital of the partnership and prepare journal entries in the books of the partnership
What other kellogg product line extension : Is it a breakfast food? What other Kellogg's product line extension (derivatives of cereals, e.g. cereal bars, etc.) are popular in that country?

Reviews

Write a Review

Business Economics Questions & Answers

  Economics assignment

This document contains various important questions and their appropriate answers in the subject field of Economics.

  Demand and supply curves

Economics is the study of the principles governing the allocation of scarce means among competing ends when the objective of the allocation is to maximize the attainment of the ends.

  Long-run perfectly competitive equilibrium for the firm

Evaluate Government intervene and correct this situation?(a) Explain the concept of a concentration ratio. A rise in the price of magarine Explain the impact of external costs and external benefits on resource allocation long-run perfectly c..

  Supply and demand diagrams

Explain each of the following using supply and demand diagrams,  With the use of a graph, explain how these two programs affect cigarette consumption and the price of cigarettes.

  Case study: fisher-price toys

The case study of the Fisher-Price Toys, Inc., a popular case in basic economics and management from the prestigious Harvard Business School.

  Draw the production possibility curve

Draw the production possibility curve and a. Define consumer surplus and producer surplus.

  Tax revenue

The Australian government administers two programs that affect the market for cigarettes

  Maximize total welfare

How many tickets to sell to maximize total welfare.

  Difference between the cv and the ev

The change in consumer surplus (?CS) is not "theoretically" justifiable like the CV and EV but it continues to be the most widely used measure of consumer welfare change. Explain how this can be reconciled

  Depict von neumann-morgenstern utility index u in a diagram

Depict the von Neumann-Morgenstern utility index u in a diagram

  What is the market solution

What is the market solution (market price and quantity) and What is the total surplus of the society under the market solution

  Calculate gross national product and net national product

Calculate gross national product and net national product

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +91-977-207-8620

Phone: +91-977-207-8620

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd