Suppose there are two firms in a market who each simultaneously choose a quantity. Firm 1's quantity is 91, and firm 2's

Business, Finance, Economics, Accounting, Operations Management, Computer Science, Electrical Engineering, Mechanical Engineering, Civil Engineering, Chemical Engineering, Algebra, Precalculus, Statistics and Probabilty, Advanced Math, Physics, Chemistry, Biology, Nursing, Psychology, Certifications, Tests, Prep, and more.
Post Reply
answerhappygod
Site Admin
Posts: 899604
Joined: Mon Aug 02, 2021 8:13 am

Suppose there are two firms in a market who each simultaneously choose a quantity. Firm 1's quantity is 91, and firm 2's

Post by answerhappygod »

Suppose There Are Two Firms In A Market Who Each Simultaneously Choose A Quantity Firm 1 S Quantity Is 91 And Firm 2 S 1
Suppose There Are Two Firms In A Market Who Each Simultaneously Choose A Quantity Firm 1 S Quantity Is 91 And Firm 2 S 1 (34.17 KiB) Viewed 18 times
Suppose there are two firms in a market who each simultaneously choose a quantity. Firm 1's quantity is 91, and firm 2's quantity is 42. Therefore the market quantity is Q = 41+ 42. The market demand curve is given by P= 225 - 5Q. Also, each firm has constant marginal cost equal to 15. There are no fixed costs. The marginal revenue of the two firms are given by: • MR1 = 225 - 1091 - 592 • MR2 = 225 - 501 - 1042 A) How much output will each firm produce in the Cournot equilibrium? B) What will be the market price of the good? C) What is the deadweight loss that results from this duopoly? D) How much profit does each firm make? E) Suppose Firm 2 produced 30 units of output. How much output should Firm 1 produce in order to maximize profit?
Join a community of subject matter experts. Register for FREE to view solutions, replies, and use search function. Request answer by replying!
Top
Post Reply

Return to “Archived Questions & Answers”