This topic contains a solution. Click here to go to the answer

Author Question: Consider a market with (inverse) demand p = 100 - 2Q. There are two firms in the market with ... (Read 38 times)

Frost2351

  • Hero Member
  • *****
  • Posts: 557
Consider a market with (inverse) demand p = 100 - 2Q. There are two firms in the market with constant marginal and average costs of 10.
 
  a. Determine the Cournot equilibrium quantities and price
  b. What would be the collusive (joint-profit maximizing) price and quantity?
  c. Derive the deadweight loss from (i) Cournot Dupoly, (ii) Collusion, and (iii) Perfect competition in this market with the two firms.

Question 2

If a product which costs 8 is sold at 10, the mark-up is
 
  A) 2.
  B) 25.
  C) 20.
  D) None of the above



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

katheyjon

  • Sr. Member
  • ****
  • Posts: 331
Answer to Question 1

a. q1 = q2 = 15
p = 100 - 2(30 ) = 40
b. 100 - 4Q = 10 Q = 22.5, q = 11.25
p = 55
c. DWL from P.C. = 0
DWL from monopoly = .5(45 - 22.5 )(55  10 ) = 506.25
DWL from duopoly = .5(45  30 )(40  10 ) = 225

Answer to Question 2

B




Frost2351

  • Member
  • Posts: 557
Reply 2 on: Jul 1, 2018
Thanks for the timely response, appreciate it


cpetit11

  • Member
  • Posts: 321
Reply 3 on: Yesterday
Wow, this really help

 

Did you know?

More than 20 million Americans cite use of marijuana within the past 30 days, according to the National Survey on Drug Use and Health (NSDUH). More than 8 million admit to using it almost every day.

Did you know?

The calories found in one piece of cherry cheesecake could light a 60-watt light bulb for 1.5 hours.

Did you know?

Ether was used widely for surgeries but became less popular because of its flammability and its tendency to cause vomiting. In England, it was quickly replaced by chloroform, but this agent caused many deaths and lost popularity.

Did you know?

Approximately 25% of all reported medication errors result from some kind of name confusion.

Did you know?

Illicit drug use costs the United States approximately $181 billion every year.

For a complete list of videos, visit our video library