Suppose there are two firms with constant marginal cost MC = 4 and the market demand is P = 76 − 3Q. (a) Calculate the m
Posted: Sun May 08, 2022 9:24 am
Suppose there are two firms with constant marginal cost MC = 4
and the market demand is P = 76 − 3Q.
(a) Calculate the market quantity and profits for each firm in
each of the following settings: • Cartel • Cournot duopoly •
Bertrand duopoly (
b) Using part a), construct a 3×3 payoff matrix where the firms
are choosing quantities. The actions available to each of two
players are to choose the quantity from the three settings above.
The total production in the market is the sum of the two quantities
and the price is determined by this market quantity.
(c) What are the Nash equilibria of this 3 × 3 game?
and the market demand is P = 76 − 3Q.
(a) Calculate the market quantity and profits for each firm in
each of the following settings: • Cartel • Cournot duopoly •
Bertrand duopoly (
b) Using part a), construct a 3×3 payoff matrix where the firms
are choosing quantities. The actions available to each of two
players are to choose the quantity from the three settings above.
The total production in the market is the sum of the two quantities
and the price is determined by this market quantity.
(c) What are the Nash equilibria of this 3 × 3 game?