Table 17-4 Only two firms, ABC and MNO, sell a particular product. The following table shows the demand curve for their product. Each firm has the same constant marginal cost of $4 and zero fixed cost. Price (Dollars per unit) Quantity Demanded Total Revenue (Units) (Dollars) 14 0 0 13 5 65 12 10 120 11 15 165 10 20 200 9 25 225 8 30 240 7 35 245 6 40 240 5 45 225 4 50 200 3 55 165 2 60 120 1 65 65 0 70 0 Questions: A) How much less do each of these firms earn in the Nash equilibrium than if they jointly maximize profits?
Table 17-4 Only two firms, ABC and MNO, sell a particular product. The following table shows the demand curve for their product. Each firm has the same constant marginal cost of $4 and zero fixed cost. Price (Dollars per unit) Quantity Demanded Total Revenue (Units) (Dollars) 14 0 0 13 5 65 12 10 120 11 15 165 10 20 200 9 25 225 8 30 240 7 35 245 6 40 240 5 45 225 4 50 200 3 55 165 2 60 120 1 65 65 0 70 0 Questions: A) How much less do each of these firms earn in the Nash equilibrium than if they jointly maximize profits?
Microeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter11: Price-searcher Markets With High Entry Barriers
Section: Chapter Questions
Problem 14CQ
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