My Math Forum  

Go Back   My Math Forum > Science Forums > Economics

Economics Economics Forum - Financial Mathematics, Econometrics, Operations Research, Mathematical Finance, Computational Finance

LinkBack Thread Tools Display Modes
November 16th, 2014, 07:08 AM   #1
Joined: Oct 2014
From: Korea

Posts: 4
Thanks: 0

Oligopoly problems

Please do help me with these. Thanks.
Problem 1:
Consider an industry with two fi rms. Let q1 be the output of rm 1, q2 for fi rm 2, and Q = q1 + q2. Consumer demand in the industry is PD(Q) = 40 - Q. Each fi rms has a cost function of c(q1) = 3q1 and c(q2) = 5q2, respectively. Assume that firms engage in Stackelberg competition. Firm 1 is the Stackelberg leader, which fi rst sets q1. After seeing
fi rm 1's output, fi rm 2 sets q2.
(1) Find the equilibrium quantity of each rm, the market price, and the pro fits for both firms.
Now, assume that the fi rms compete in a Cournot fashion.
(2) Find the output of each firm and the market price at the equilibrium.
(3) Do consumers prefer Cournot competition or Stackelber competition?
(4) Compare the social welfare of the market outcomes in Cournot and Stackelberg

Problem 2.

Consider a market with demand Q = 256/p2 (squared p). To enter the market a fi rm must first pay an entry cost ,k, thereafter it can produce at a constant marginal cost of 2 with no other fixed costs.
(1) If a government grants a fi rm an exclusive monopoly in this market, how low must be for the potential monopolistic fi rm to enter the market?
(2) If instead there are two identical potential entrants who will engage in Cournot competition after they both enter, how low must k be for both of them to enter the market?
Jannah1721 is offline  

  My Math Forum > Science Forums > Economics

oligopoly, problems

Search tags for this page
Click on a term to search for related topics.
Thread Tools
Display Modes

Similar Threads
Thread Thread Starter Forum Replies Last Post
How to master maths - should we solve simple problems or variety of problems? joshis1 Algebra 2 October 10th, 2014 03:55 PM
3 problems. helpme93 Elementary Math 15 June 20th, 2014 01:04 AM
Log problems and word problems help thenewkid77 Algebra 1 March 11th, 2010 06:27 AM
Two problems InTech Linear Algebra 1 November 3rd, 2008 06:49 PM
Problems kingsthahn Calculus 4 May 2nd, 2008 05:22 AM

Copyright © 2019 My Math Forum. All rights reserved.