02 May Question: A monopolist can produce at a constant average (and marginal) cost of It faces a market demand cu…
A monopolist can produce at a constant average (and marginal) cost of It faces a market demand curve of Q.71-P Calculate the profit-maximizing price and quantity for this monopolist. Also calculate its profits The monopoly would produce 33 units of output at a price of $ 38 (Enter numeric responses using real numbers rounded to two decimal places,) In turn, the monopoly would eam profit of $ 1089 Suppose a second firm enters the market. Let Q, be the output of the first firm and Q be the output of the second. Market demand is now given by Q1+Q2-71-P. Assuming that this second firm has the same costs as the first, write the profits of each firm as a function of Q1 and Q2 The profit functions for Firm 1 (11,) and for Firm 2 (I12) are OA. I1, PxQ1-50 and I12 PxQ2-502 OD. 11, 171-(a,+2)-50, and I12 171-(2)-502
Suppose (as in the Cournot model) that each firm chooses its proft-maximizing level of output on the assumption that its competitor’s output is fixed. Find each firm’s reaction curve(i.e., the rule that gives its desired output in terms of its competitor’s output). The reaction curves for Firm 1 and Firm 2 are OA. Q 66.00-0.5Q2 and Q2 66.00-0.501 OB. Q1-33.00-0.5Q2 and Q2#33.00-0.5Q1. C. Q1-66.00-Q2 and Q2-66.00-Q1 Q1#3300-Q2 and Q2:33.00-Q1. Q1-33 00-202 and Q2-33.00-201. D. o E. Caloulate the Cournot equilibrium (i.e, the values of Q1 and Q2 for which each firm is doing as well as it can given its competor’s output.). What are the resulting market price and profits of each firm? When oom peting, each firm will produce □ units of output. The market price will bo $ In tun, each firm will earn profit of $ Suppose there are N fims in the industry, all with the same constant marginal cost, MC 5. Find the Cournot equilibrium. How much will each firm produce, what will be the market price, and how much proft will each firm ean?
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