This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Consider a market with (inverse) demand p = 100 - 2Q. There are two firms in the market with ... (Read 13 times)

Frost2351

  • Hero Member
  • *****
  • Posts: 557
on: Jul 1, 2018
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
Reply #1 on: Jul 1, 2018
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
Gracias!

kishoreddi

  • Member
  • Posts: 329
Reply 3 on: Yesterday
Excellent

« previous next »
 

Did you know?

The senior population grows every year. Seniors older than 65 years of age now comprise more than 13% of the total population. However, women outlive men. In the 85-and-over age group, there are only 45 men to every 100 women.

Did you know?

Automated pill dispensing systems have alarms to alert patients when the correct dosing time has arrived. Most systems work with many varieties of medications, so patients who are taking a variety of drugs can still be in control of their dose regimen.

Did you know?

There can actually be a 25-hour time difference between certain locations in the world. The International Date Line passes between the islands of Samoa and American Samoa. It is not a straight line, but "zig-zags" around various island chains. Therefore, Samoa and nearby islands have one date, while American Samoa and nearby islands are one day behind. Daylight saving time is used in some islands, but not in others—further shifting the hours out of sync with natural time.

Did you know?

Most childhood vaccines are 90–99% effective in preventing disease. Side effects are rarely serious.

Did you know?

Coca-Cola originally used coca leaves and caffeine from the African kola nut. It was advertised as a therapeutic agent and "pickerupper." Eventually, its formulation was changed, and the coca leaves were removed because of the effects of regulation on cocaine-related products.

All of the homes in this new neighborhood of Brentwood, California, are for sale, evidence of the co All of the homes in this new neighborhood of Brentwood, California, are for sale, evidence of the co
A slave market in Marrakesh, Morocco. This lithograph is from the 1800s. A slave market in Marrakesh, Morocco. This lithograph is from the 1800s.
How to find the inverse of any function (Part 2) How to find the inverse of any function (Part 2)
How to integrate using inverse trigonometric substitution (Question 1) How to integrate using inverse trigonometric substitution (Question 1)
Differentiation of Inverse Trigonometric Function Differentiation of Inverse Trigonometric Function
Economic objectives of firms Economic objectives of firms
Video: Muscular System Animation

For a complete list of videos, visit our video library