Just do 17 & 22 17. Using the information from the above question: is the market
ID: 1125860 • Letter: J
Question
Just do 17 & 22
17. Using the information from the above question: is the market in which Firm A is selling its output currently in long run equilibrium? Questions 18-21 rely on the following prompt: Firm A and Firm B compete in the sale of a product with market inverse demand given by P(0) = 150-Q, where Q is market output, and Q = qA + qB (4a-Firm A's output, qB-Firm B's output). Firm A's Total Cost function is given by TCA qA) 10qA and Firm B's is given by 18. Find the value of Q when Firms A and B Cournot compete to maximize profits (i.e. when they simultaneously determine profit maximizing output). 19. At what price will Firms A and B sell their output? 20. Suppose that Firm A's total cost function were to change to TCA(A) 10qA 50, (so, a fixed cost of 50 has been added). How will Firm A's profit maximizing output level change as a result of this? How will Firm B's profit maximizing output level change as a result of this? 21. Suppose that Firm A's total cost function were to change to TCACqA) 20qA, (so, Firm A's marginal cost has increased from 10/unit to 20/unit). How will Firm A's profit maximizing output level change as a result of this? How will Firm B's profit maximizing output level change as a result of this?Explanation / Answer
22) Strategies for player 1 are medium when player 2 is selecting left, high when player 2 select middle, and low when player 2 selects right.
Strategies for player 2 are, middle when player 1 chooses high, right when player 1 chooses medium, and left when player 1 chooses low
There are two strategies that are common in the strategies profile of player 1 and player 2. Therefore the Nash equilibrium in this case is when player 1 chooses high and player 2 chooses middle.
17 question needs information from previous question.
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