Find the nash equilibrium of the second stage

Assignment Help Business Economics
Reference no: EM131103612

Assume that the market demand in an industry is: P(Q) = 1 – Q, and that the cost functions of the firms are Ci(qi) = 0.5 qi + F, for all the firms i = 1, 2,…n, where m < 1, and F is the cost of entry into the industry. Consider the free entry sequential game in which the firms decide whether to enter into the market in the first stage, and in the second stage they decide output simultaneously.

-Find the best response function of (n) firm in the second stage of the game.

-Find the Nash equilibrium of the second stage.

-Find the number of firms and the output level of every firm that result from the perfect Nash equilibrium.

Reference no: EM131103612

Questions Cloud

Reserve ratio-what will happen to the money supply : Suppose that the required reserve ratio is 6.25%. If the Fed sells $350 million of bonds to the First National Bank. What happens to reserves and the monetary base? What will happen to the money supply? Show the changes in First National Bank's balan..
Selling baskets made out of tree vines : Sarah earns $500 per week selling baskets made out of tree vines. With this money she buys sushi and rose bushes. Each piece of sushi costs $1 and each rose bush costs $10. If Sarah spends $170 per week on sushi, the maximum quantity of rose bushes c..
Find the per worker production function : Consider an economy described by the production function: Y = F (K, L ) = K1/2L1/2. Find the per worker production function. What savings rate is necessary for the economy to reach this consumption maximizing steady state?
Determine the effects of this in the long-run steady state : In the Malthusian model, suppose that there is technological advance that reduces death rates (which in turn increases the population growth rate.) using diagrams, determine the effects of this in the long-run steady state and explain your results.
Find the nash equilibrium of the second stage : Assume that the market demand in an industry is: P(Q) = 1 – Q, and that the cost functions of the firms are Ci(qi) = 0.5 qi + F, for all the firms i = 1, 2,…n, where m
Consumer whose preferences over consumption today : Intertemporal Choice Consider a consumer whose preferences over consumption today and consumption tomorrow are represented by the utility function U(c1, c2) = ln c1 + β ln c2, where c1 and c2 and consumption today and tomorrow, respectively, and β is..
There were numerous global conflicts : In 2013, there were numerous global conflicts: civil war in Syria, unrest in Brazil, and continued turmoil in Iraq and Afghanistan. Though many of these conflicts are far from U.S. borders, how might they play out in the American economy (i.e., in la..
Find the equation representing total revenue as function : Suppose the Calloway Cab Company has an exclusive franchise to provide limousine service between the airport and center city. Its total cost is TC = 2400 + 60Q + .50Q2, where Q is rides per day. Find the equation representing total revenue as a funct..
What happens to reserves and the monetary base : Suppose that the required reserve ratio is 6.25%. If the Fed sells $350 million of bonds to the First National Bank.  What happens to reserves and the monetary base?

Reviews

Write a Review

Business Economics Questions & Answers

  Does this lead to misleading comparison between countries

Goods and services sold in black markets, such as illegal0 drugs, are generally not included in GDP. Does this lead to misleading comparison between countries? Should these activities be included as a positive or negative in GDP?

  Eliminating the payer affect supply-demand and price

Why is the cost of health care so high in the U.S. and the U.S. does not have the best system. If a person has co-pay health insurance what does he/she base his/her purchase decision on, the real price or what actually comes from his/her pocket? How ..

  Calculate optimal bundle of contingent claims

Tony Taxpayer earns $2000 in income. Income is taxed at 20%. Tony can underreport his income to the IRS and pay taxes only on the amount he reports, but should he be audited, the IRS will impose a surcharge of 200% on his unpaid taxes; Calculate Tony..

  Conduct a hypothetical life cycle assessment

Choose a product that negatively affects the environment, assuming a linear flow of materials. Then, use a cyclical materials flow approach, and conduct a hypothetical life cycle assessment (LCA), pointing out at least two preventive initiatives that..

  European parliament-european council-european commission

Imagine that you are a policy consultant and you are asked your thoughts on restructuring the European Union. In your opinion, which of the following institutions is the most significant (you must also define what you feel the concept of “significant..

  Production is concentrated into a few firms

Most members of labor unions work in the public sector, industries that are regulated, or industries in which production is concentrated into a few firms.

  Produce two goods-timber and televisions

Suppose two countries, Home and Foreign, produce two goods, timber and televisions. Assume that land is specific to timber, capital is specific to televisions, and labor is free to move between the two industries. Determine whether each statement is ..

  Government spending have multiplied effect on economy

How can government spending have a multiplied effect on the economy? Hint: Need to recall of the “income/spending multiplier” concept, seen in module five.

  Statements about indifference curves is true

Which of the following statements about indifference curves is true

  The store financed the refrigerator by charging

A refrigerator sold for $500. The store financed the refrigerator by charging 0.5% monthly interest on the unpaid balance. If the refrigerator is paid for with 30 equal end-of-month payments: What will be the size of the monthly payments? If the firs..

  Analyzing how the risk tolerance factors play in supplying

Using the sameproduct example above, analyzing how the risk tolerance factors play in supplying the good or service and how this should influence management's decisions.

  Changes on the price and output of physician services

In the country of Drazah Larom (moral hazard spelled backward), health insurance is nonexistent and all medical markets are perfectly competitive. Use supply and demand analysis to explain the impact of the following changes on the price and output o..

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!

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