Firm prices profit and market outcome in nash equilibrium

Assignment Help Business Economics

Reference no: EM131386324

Suppose that firm 1 and firm 2 operate under conditions of constant average and marginal cost but that firm 1’s marginal cost is 1 = 10 and firm 2’s marginal cost c2 = 8. Market demand is Q = 500 − 20P.

(a) Suppose e two firms practice Stackelberg competition, where firm 1 chooses its output first then firm two chooses its output quantity second. Compute the Nash equilibrium quantity.

(b) Compute firms’ prices, profit and market outcome in the Nash equilibrium.

Reference no: EM131386324

Questions Cloud

Aggregate demand management refers to changing of policy : Aggregate demand management refers to the changing of policy variables like government expenditures, taxation (fiscal policy tools) or money supply and interest rates (monetary policy tools) to attain a target level of GDP. Why is there an inverse re..

Arc elasticity of demand formula : A minor league baseball team raised the average price of its tickets from $8 to $8.50 and found that average attendance at its games dropped from 5,200 to 4,800. Using the arc elasticity of demand formula, the price elasticity of demand for tickets..

Demand and supply model predicts that new technologies : In the labor market, the demand and supply model predicts that new technologies could raise the pay of high-skill labor but reduce the pay of low-skill labor. Explain why and demonstrate your point with a demand and supply diagram.

Explain should a 1 prevail in given condition : A-1 submitted a bill to Jaffe for $1,200 for materials furnished and labor performed up to the time of the destruction of the premises. Jaffe refused to pay the bill, and A-1 now seeks payment from Jaffe. Should A-1 prevail? Explain.

Firm prices profit and market outcome in nash equilibrium : Suppose that firm 1 and firm 2 operate under conditions of constant average and marginal cost but that firm 1’s marginal cost is 1 = 10 and firm 2’s marginal cost c2 = 8. Market demand is Q = 500 − 20P. Compute firms’ prices, profit and market outcom..

Principles of the free market and competition : Using original content, could you please help me with the following discussion question? Give an example in the marketplace that describes the principles of the free market and competition.

Can rebecca enforce the contract : On April 1, Rebecca tendered the deed to Nancy, who refused to pay Rebecca the agreed purchase price. Rebecca brought an action against Nancy for breach of contract. Can Rebecca enforce the contract?

Who will prevail in given situation and why : Perfection counterclaimed against Hodges for his failure to deliver the additional two hundred tons. Who will prevail? Why?

Compute the nash equilibrium quantity : Suppose that firm 1 and firm 2 operate under conditions of constant average and marginal cost but that firm 1’s marginal cost is c1 = 10 and firm 2’s marginal cost c2 = 8. Market demand is Q = 500 − 20P. Supposee two firms practice Cournot competitio..

User Account

All Pages