AnsQ10 - Econ 301: Intermediate Microeconomic Theory...

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Econ 301: Intermediate Microeconomic Theory NAME: Korinna K. Hansen Quiz 10 Consider the following in a price leadership duopoly model: Market demand: D(p) = 20 - P Total Costs for the follower: C2(Y2) = yl Total Costs for the leader: Cl(Yl) = 5 yl Where: yl and y2 are quantities produced by firm 1 (leader) and firm 2 (follower). 1). What is the supply function, S(P), for the follower? Be specific. ,he follower s-eA--! H C 2 :::: f :::) ?~h =f -'? p"'" 2~z. -;:{:s 2. == f 2). What is the residual inverse demand, R(P), for the leader? Be specific. RCp)-=J)cp)-S(p)-== ~-p-f =20-; r :! n{ 3 ~ _ lfO 2. Rv./J""of. .. ilAVe/K ole<MIMAJ I~ p) -:= fMJ - 2- f ~ I! - -:3 - 3 ~ I J for ~ LeAdLr 3). What is the quantity the leader firm will produce and the price he will charge? Be specific
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