ECON 162
HW 4
ECON代考 In a market characterized by the following (inverse) demand function P=40-Q two firms compete a la Cournot. Firm A has…
Q1 (Cournot Model)
Q2 (Bertrand Model) ECON代考
Q3 (Game Theory)
Q4 (Monopoly and Duopoly) ECON代考
Initially there is one firm in a market for cars. The firm has a linear cost function ?(?) = 2?. The market inverse demand function is given by ?(?) = 9 − ?.
(1) What price will the firm charge? What quantity of cars will the firm sell? How much profit will the firm make?
(2) Now, a second firm enters the market. The second firm has an identical cost function. What will the Cournot equilibrium output for each firm be?
(3) What is the Stackelberg equilibrium output for each firm if firm 2 enters second?
(4) How much profit will each firm make in the Cournot game? How much in Stackelberg? Which market is preferred by firm 2?
