4. Suppose there are two rms in the market. Firm 1' marginal cost is M 01 (q) = 40 and Firm
2s marginal cost is M 02(1) = 20. Suppose the market demand function is P(Q) 2 120- Q.
Firms compete in quantities in a. static game.
(3.) Suppose both rms decide

4. In real-world, some companies target to maximize their market share instead of maximizing
prot. Is targeting to increase market share a. good strategy? Lets see this.
Suppose there are two rms. Both rms have constant marginal cost 171.6(9) = 10, and th

. In the market there are too consumers and one mon0polist. Consumer 1s demand inction
is FAQ) = 10 - Q and Consumer 2s demand function is P2(Q) = 8 3Q. The two
consumer look identical and the monopolist can not distinguish them. The monopolist tries
to i

Sample Midterm
Econ 208
Term 1 2016
1. Two firms compete with quantities in a Cournot fashion. Market demand is given by P (Q) =
A Q, where Q = q1 + q2 and A > 0 is constant. Assume that marginal costs are constant
and c1 < c2 and A > 2c2 .
(a) Find the b

Homework 2
Econ 208
Submit your answer at the beginning of Lecture 6.
1. Suppose the following table summarizes the willingness-to-pay for dierent dishes by the three
types of consumers. Assume all consumers come in equal proportion BUT the restaurant
can

Sample Midterm
Econ 208
Term 1 2016
1. Two firms compete with quantities in a Cournot fashion. Market demand is given by P (Q) =
A Q, where Q = q1 + q2 and A > 0 is constant. Assume that marginal costs are constant
and c1 < c2 and A > 2c2 .
(a) Find the b