Consider a homogeneous-good duopoly in which inverse demand is given by P(Q) = 2 − Q, where Q, homework help

/in /by

Question #3 in pdf ONLY!!!

3. Consider a homogeneous-good duopoly in which inverse demand is given by P(Q) = 2 − Q, where Q

denotes the total output in the market. Firm 1’s marginal cost is c1 = 1 while firm 2’s is c2 = c ∈ [0, 1.5].

(a) (3 points) Determine the Cournot equilibrium outputs and the associated social welfare (as a function

of the parameter c).

(b) (3 points) Determine the Stackelberg equilibrium outputs when firm 1 chooses its output first. Determine

the associated social welfare.

(c) (3 points) For what values of c does the Cournot equilibrium give greater social welfare and for which

does the Stackelberg equilibrium?

 
Do you need a similar assignment done for you from scratch? We have qualified writers to help you. We assure you an A+ quality paper that is free from plagiarism. Order now for an Amazing Discount!
Use Discount Code "Newclient" for a 15% Discount!

NB: We do not resell papers. Upon ordering, we do an original paper exclusively for you.