How many doughnuts will bay coffee produce in the cournot

Assignment Help Macroeconomics

Reference no: EM133394115

Question: James Bay has only two places that sell doughnuts, James Coffee and Bay Coffee. The doughnuts at James Coffee and Bay Coffee taste exactly identical - nobody can tell the difference. James Coffee has constant marginal costs of $1 per doughnut. Bay Coffee has constant marginal costs of $2 per doughnut. Fixed costs are zero for both doughnut shops.

Residents of James Bay have an overall inverse demand function for doughnuts given by p = 38 - 0.04q, where p is the price of a doughnut, and q is the total number of doughnuts that they are willing to buy at price p. For the purposes of this question, assume that the coffee shops can sell customers a fraction of a doughnut, and round all of your answers to the second decimal point.

Suppose that the two doughnut shops are making decisions simultaneously. How many doughnuts will James Coffee produce in the Cournot equilibrium?

How many doughnuts will Bay Coffee produce in the Cournot equilibrium?

What will be the price of a doughnut in James Bay in the Cournot equilibrium?

Suppose that the owners of James Coffee decide to change their opening hours and open later in the day. Now, when they decide how many doughnuts to bake for the day, they can see how many doughnuts Bay Coffee has baked.

Given this new setting, how many doughnuts will James Coffee now decide to bake?

How many doughnuts will Bay Coffee now bake?

What will be the price of a doughnut in James Bay under this new scenario?

Reference no: EM133394115

Questions Cloud

How people often behave in an irrational way : How people often behave in an irrational way (in the field of economics, financial decisions or consumer choice), according to this bias

Describe your own efforts to apply breadth to your thinking : Describe your own efforts to apply breadth to your thinking when it comes to ethical issues? Are you good at it? Is it difficult for you

What type of risk treatment : Given the risks and budget below, what type of risk treatment (from the list above) would you chose for each specific risk and why?

Chose from any topics in mental health ranging from clinical : Chose from any topics in mental health ranging from clinicals, labs or theory as a reflection piece. Please include any new ideas or interventions

How many doughnuts will bay coffee produce in the cournot : How many doughnuts will Bay Coffee produce in the Cournot equilibrium and What will be the price of a doughnut in James Bay in the Cournot equilibrium

What is it that creates profit, according to mises : What is it that creates profit, according to Mises and why does Mises say that people who tax profits are "injuring themselves

What is the connection between our studies and the article : What is the connection between our studies and the article? How do our studies help explain the information in the article? How do our studies help you better u

Discuss the role of dns in networking : Discuss the role of DNS in networking. How can the following commands help troubleshoot network connectivity issues?

Discuss the research project was approved by the : The researchers (authors) ensured that the study was conducted legally. According to them, the research project was approved by the university's Institutional

User Account

All Pages