Consider The Following Duolopy Market The Firms Produce Differentiated Goods The Demand For Good Is 9 10 4p Pj F 1 (35.51 KiB) Viewed 11 times
Consider the following duolopy market, The firms produce differentiated goods. The demand for good is 9; = 10-4p; +Pj. Firms do not face any fixed costs. For firm 1, per unit cost of production is 4, for firm 2 per unit cost of production is 2. In the Nash Equilibrium, Firm 1 and firm 1 set the price equal to 40/3 Firm 1 sets the price equal to 226/63 The quantity produced by firm 2 is 38/3
2 ranchers use a grassland to feed their cows. The ranchers must choose how many cows to raise. The benefit of raising a cow for a rancher is 100-5G per cow, where G is the total quantity of cows using the grassland. The marginal cost of raising a cow is 10. Hence, the net benefit of raising cows for any rancher is (100-5G)g - 10g , where 9 is the quantity of cows raised by the rancher. What is the quantity of cows that each rancher raises in a Nash Equilibrium? 6 7
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