a. Suppose both firms have entered the industry. What is the joint profit-maximizing level of output? How much will each firm produce? How would your answer change if the firms have not yet entered the industry?
b. What is each firm’s equilibrium output and profit if they behave noncooperatively? Use the Cournot model. Draw the firms’ reaction curves and show the equilibrium.
c. How much should Firm 1 be willing to pay to purchase Firm 2 if collusion is illegal but a takeover is not?
Recently Asked Questions
- Provide an example of an implicit and an explicit bias. The examples may be from your own life, from something you have observed, or from the resources
- Please refer to the attachment to answer this question. This question was created from RX1020_Wk1_Worksheet2.
- Please Help Solve these questions with equations and as much information as possible.