Joint equilibrium quantity, Microeconomics

Assignment Help:

The sole producer of the anti-diarrhea drug STOP supplies two retail pharmacies in an isolated village. The two pharmacies compete à la Cournot in a market characterized by an inverse demand function

 

                       P(Q)= 100-Q

where p  is the price consumers pay for a package of pills. The costs the pharmacies have per package sold are €40 plus the amount they have to pay for a package to the producer of STOP. Assume that the marginal cost of STOP is €12 per package and that there are no fixed costs. Moreover, suppose that STOP uses a two-part tariff with a price per package equal to S p and a fixed amount f  which both pharmacies require to pay to STOP to become its eligible suppliers.

 

a. Assume that the fixed amount f is so low that both retailers remain in the market. What is the joint equilibrium quantity of the two pharmacies that will be offered as a function of p ?

 


Related Discussions:- Joint equilibrium quantity

Institutionalist economics, Institutionalist Economics: A school of heterod...

Institutionalist Economics: A school of heterodox economicsthat emphasizes importance of institutional development and evolution (as opposed to ‘pure' market forces) in explaining

Theory of inter-temporal consumption, THEORY OF INTER-TEMPORAL CONSUMPTION:...

THEORY OF INTER-TEMPORAL CONSUMPTION: In the previous two units, we have been concerned with choices among contemporaneous commodities. An important class of choices made by c

Module 5 disccussion, Ask question #Minimum 100 words accepteFill out this ...

Ask question #Minimum 100 words accepteFill out this National Council on Economic Education worksheet: Technology and Monopolies (Links to an external site.) Now, pretend that you

Explain the main problems with government intervention, Question: i) Ex...

Question: i) Explain the main problems with government intervention. ii) Why and how do governments seek to control monopolies? iii) A country should specialise in the pr

Comparison with our needs - structure of national income, Comparison with O...

Comparison with Our Needs: We can further test our performance by juxtaposing it with our requirements. Admittedly, it is very difficult to determine 'needed' rate of growth w

Economics final paper analysis, This is what this paper should be about ...

This is what this paper should be about 1) In the first paragraph analyze what you most learned from the course to reflect on the statement below. 2) In each separat

Policy implications - structure of national income , Policy Implications: ...

Policy Implications: The expansion of the services sector  has wider implications for population, employment, and trade prospects of the economy, some of which are as follows:

Economic Question , 4) The prevention of major swings in economic activity ...

4) The prevention of major swings in economic activity can be handled most easily by the A. household sector B. business sector C. financial sector

How do we obtain total cost curve, Total cost curve (TC) is obtained by add...

Total cost curve (TC) is obtained by adding up vertically total fixed cost and total variable cost curves because the total cost is sum of total fixed cost and total variable cost

Demand functions for one product facing two markets, Suppose a firm faces t...

Suppose a firm faces two markets for the same product. In market A, the demand function is PA=60-QA, while in market B the demand function is PB=36-0.5QB. The total cost function i

Write Your Message!

Captcha
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