Two firms, App and Sam, producing a good named Smart 13 compete in a Stackelberg duopoly. The inverse demand equation is P=25-(9,+92) the total cost function for Sam (the follower) is TC2=3q2. Determine the leader's maximum profit. The total cost function for App (the leader) is TC1 =1q1, and Moving to another question will save this response. Question 6 of 22
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- Ugly Dolls Inc. (UD) is a firm in Mytown that sells its products on a market under monopolistic competition. The cost function of UD is represented by TC = 100+10Q. Lately, because of the UD is making a big amount of profit, some firms enter the market to compete. Assume that Mytown engages in free trade in the dolls markets with Yourtown, who also faces a market with monopolistic competition. Because of this we can expect that, (a) The numbers of firms operating in this market will not change. (b) At equilibrium the profit of firms will increase. (c) The quantity of types of dolls available to consumers will increase. (d) All the above answers are correct.Consider a duopoly with a leader (called L) and a follower (called F). The market demand is given as: P=500-0.25Q, where Q=QL+QF The total cost function for the leader is given as: TCL=0.03QL The total cost function for the follower is given as: TCF=0.1QF All variables are per day, per plant. What is the profit-maximizing quantity for the leader (per day, per plant)? (Note: Round your answer to two decimal pointsUgly Dolls Inc. (UD) is a firm in Mytown that sells its products on a market under monopolistic competition. The cost function of UD is represented by TC = 100+10Q. Lately, because of the UD is making a big amount of profit, some firms enter the market to compete. If the number of firms entering the dolls market increase, we know that, (a) The price of dolls will drop. (b) The average cost of UD will increase. (c) The quantity sold by UD will drop. (d) All the above answers are correct.
- Suppose that Raleigh and Dawes are the only sellers of bicycles in the UK. The inverse market demand function for bicycles is P(Y)=200-2Y. Both firms have the same total cost function: TC(Y)=12Y and the same marginal cost: MC(Y)=12. Suppose this market is a Stackelberg oligopoly, and Raleigh is the first mover. Write down a formula for the reaction function of Dawes. Calculate the equilibrium quantity that each firm produces and the equilibrium price in the market. Give typing answer with explanation and conclusionConsider a Stackelberg duopoly with the following inverse demand function: P = 100 - 2Q1 - 2Q2. The firms' marginal cost are identical and given by MCi(Qi) = 2Qi. Based on this information the Stackelberg follower's reaction function is Group of answer choices QF = 24.5 - 0.25QL. QF = 49 - 0.25QF. QF = (50/3) - (1/3)QL. QF = 24.5 - QL.per pair You are the CEO of a company that advises clients on pricing strategies. Bilbo Baggins is a profit maximizing client who produces uniquely styled shoes and hires you for pricing advice. The graph shows the demand and marginal revenue (MR) curves faced by Bilbo's company for two different groups of consumers. Assume Bilbo can prevent the reselling of his shoes, faces constant marginal cost (MC) equal to $20/pair, can identify varying consumer groups, and has no fixed costs (so, MC ATC). Use the graph to answer the questions. = Price $100 90 80 70 60 50 40 B What price should Bilbo charge? He should charge the more elastic group $60/pair and the less elastic group $70/pair. 30 30 20 10 10 MR 2 Demand 2 He should shutdown in the short run because price is not greater than fixed costs. 0 100 200 300 40C He should price discriminate and produce where P = MC and charge $20/pair. He should produce where MR = MC and charge $70/pair.
- Two firms compete on price every year. The inverse demand function each firm faces depends on which firm has chosen the lowest price that year. The one that did captures the entire market. If, on the other hand, both prices are the same then they split the market evenly. Consumers round up prices to the nearest integer. For the firm with the lowest price p, demand is given by: q = 24-2p: Marginal costs are constant and equal to $4 for both firms. a. Define the Normal form of the stage game and determine the Nash Equilibria, the Cooperative Equilibrium and the Optimal Deviation from cooperation. b. For the once repeated (2 stages) game, determine if a Nash Equilibrium exists that improves on simply playing the (better) Nash Equilibrium of the stage game twice c. For the infinitely repeated game, determine what the interest rate would have to be to prevent the firms from cooperating. d*. Determine the relation between the interest rate and the number of punishment periods in a…Suppose that Raleigh and Dawes are the only sellers of bicycles in the UK. The inverse market demand function for bicycles is ?(?)=200−2?. Both firms have the same total cost function: ??(?)=12? and the same marginal cost: ??(?)=12.Suppose this market is a Stackelberg oligopoly and Raleigh is the first mover.a) Write down a formula for the reaction function of Dawes.b) Calculate the equilibrium quantity that each firm produces and the equilibrium price in the market.c) At the Stackelberg equilibrium, how much profit does each firm make?Suppose now that the two firms decide to act like a single monopolist.a) What will the total quantity of bicycles sold in the market be and what will the equilibrium price be? Represent the profit maximisation problem on a graph and indicate the price and quantity at the equilibrium.b) Calculate the total profit made by the two firms when they act like a monopoly. Compare it with the total profit they were making in the Stackelberg oligopoly.c) For the…Suppose you're the manager of Babylon Jazz Bar. And, your bar has both young and adult customers. The demand for a typical adult customer is Q4 = 18– 3P and, for a typical young customers is Q' = 10 – 2P, where Q shows number of drinks and P shows price per drink. The marginal cost of a drink is 2-TL. And, you want to determine an entrance fee & a price per drink that maximize Babylon's profit. a. What will be the fees (entrance & per drink) for adult customers, and number of drinks? b. What will be the fees for young customers, and number of drinks? c. What is the profit of Babylon if there are 100 customers in each group?
- The inverse demand for a homogeneous product Stackelberg duopoly is P = 14000 – 20. The cost functions for the leader and follower are C(Q) = 2000Q, and C;(QF) = 4000Q, respectively. a) What is the follower's revenue function? Note that MRF = 14,000-2Q1-4QF and MCF = 4,000. b) What is the follower's reaction curve? c) Determine the equilibrium output level for both the leader and the follower. [Note that for a quadratic revenue function R(Q)=aQ²+bQ+c, it holds that MR(Q)=2aQ+b.] d) Determine the equilibrium market price. e) Determine the profits of the leader and the follower.Microsoft is the market leader in office software with its MSOffice. Its marginal cost of production c is 1 dollar per unit. Home users demand 40 million licenses and are willing to pay 50 dollars, whereas businesses demand 60 million licenses and are willing to pay 100 dollars. Microsoft also produces a home version of MS Office at a marginal cost of c'=2. Home users and businesses are willing to pay 60 and 40 dollars, respectively, for the home version. Which is the best pricing strategy for Microsoft? O Selling MSOffice Professional at 100 Selling MSOffice Home at 40 Selling MSOffice Professional units at 100 and MSOffice Home units at 40 Selling MSOffice Professional at 80 dollars and MSOffice Home at 40 dollarsType out the correct answer ASAP with proper explanation of it within 40 50 minutes.will give you thumbs up only for the correct answer. Thank you Inverse market demand is: P = 1,000 - (Q1+ Q2). Costs for each firm are identical and given by: Ci(Qi) = 4Qi The profit earned by the leader in a Stackelberg oligopoly equals $ What is Q1? What is Q2? What is Price