State the profit maximization problem of firm, Basic Statistics

Assignment Help:

Consider two firms producing an identical product in a market where the demand is described by p = 1; 200 - 2Y. The corresponding cost functions are c1 (y1) = y21 and c2 (y2) = 3y22

(a) State the profit maximization problem of firm 1 and use the first order condition to derive firm 1s reaction function.

(b) State the profit maximization problem of firm 2 and use the first order condition to derive firm 2 s reaction functions.

(c) Solve the system of reaction functions to identify how much each firm is producing; what is the market quantity, the market price, and the corresponding individual and collective profits.

(d) Assuming that the firms can coordinate their actions, what are the individual quantities produced the market quantity, the market price, and the resulting joint profits?

(e) How will the firms distribute the joint profits (Hint: find the minimum amount that each firm is willing to accept and the maximum amount available for each firm under the cartel agreement). Is this form of cooperation sustainable? Explain.

 


Related Discussions:- State the profit maximization problem of firm

Probability, A box contains 20 fuses of which 5 are defective If 2 fuses ar...

A box contains 20 fuses of which 5 are defective If 2 fuses are chosen together at random what is the probability that both the fuses are defective?ion..

What is a basis point?, What is a basis point? A base factor is a hundre...

What is a basis point? A base factor is a hundredth (1/100) of an amount factor. Indicated another way, one amount factor is equal to 100 base factors. This means that if an amo

Life tables, For public health purposes, the force of mortality in a popula...

For public health purposes, the force of mortality in a population is usually measured by means of such indices as crude death rate. Infant mortality rate, specific death rate at d

Experimental design, What is the difference between multiple independent va...

What is the difference between multiple independent variables and multiple levels of independent variables are that multiple independent variables sk question #Minimum 100 words ac

Proton-neutron hypothesis, This hypothesis was put forward by Heinsberg aft...

This hypothesis was put forward by Heinsberg after the discovery by Chadwick. According to this hypothesis, a nucleus of mass number A and atomic number Z contains Z protons, and

How to calculate Median?, Median The median describes the value of the ...

Median The median describes the value of the middle term in data. The data set must be ranked first in increasing order before the middle value is identified. The median separa

Correlation analysis and coefficient, Individual Music scores Mathematics s...

Individual Music scores Mathematics scores Angela 2 8 Arthur 6 3 Peter 4 9 Mike 5 7 Barbara 7 2 Jane 7 3 Jean 2 9 Ruth 3 8 Alan 5 6 Theresa 4 7 Assess the data using a Correlation

What is meaning of the ldd detection strategy, A, Suppose a CD player playe...

A, Suppose a CD player player tries to detect whether its partner is C player instead of a DD player by looking for external signals that are at least as typical for DD players tha

Hom, (A) Find the binomial probability P(x = 5), where n = 15 and p = 0.50....

(A) Find the binomial probability P(x = 5), where n = 15 and p = 0.50. (B) Set up, without solving, the binomial probability P(x is at most 5) using probability notation. (C) H

Index numbers, discuss the considerations to be born in mind when constract...

discuss the considerations to be born in mind when constracting index numbers

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