Business, 20.03.2020 04:11 george8396

Consider two firms that compete in Cournot oligopoly. They face inverse demand p(Q) = 120−Q where Q = q1 +q2 is the sum of the two firms’ output. The firms can produce this good at a constant marginal cost of 60.

a. Solve for the Cournot equilibrium quantities in the market. What is the equilibrium price?
b. What is the HHI in this market?
c. Suppose the firms merge to form a monopoly and do not realize any cost efficiencies from it. What is the new equilibrium price? What is the change in HHI arising from the merger?
d. Suppose the firms merge to form a monopoly and as a result the new firm is able to produce at a marginal cost of 30. What is the new equilibrium price? What is the change in HHI arising from the merger?
e. Comment on the following statement: "We are seeing an unprecedented increase in the size of firms and the concentration of industries and suggest the government intervene to protect the interests of consumers."

Answers: 2

Show answers

Another question on Business

Business, 21.06.2019 15:00

Wanda has graduated from community university (cu) and after nine months has failed to find a job. she graduated with a degree in business, and her college was aacsb accredited. (aacsb accreditation is a specialized accreditation for business schools that evidences a quality program.) in her complaint, she alleges that four years of school and tuition should guarantee a job in the field of study and states that she wants her money back. at no time did cu guarantee job placement, either through express or implied statements. wanda does not disagree with this but still thinks that she was wronged and that it is unfair to graduate and not get a job automatically. cu will be successful in extinguishing wanda's lawsuit if its attorney files a

Answers: 2

Answer

Business, 22.06.2019 06:20

James albemarle created a trust fund at the beginning of 2016. the income from this fund will go to his son edward. when edward reaches the age of 25, the principal of the fund will be conveyed to united charities of cleveland. mr. albemarle specified that 75 percent of trustee fees are to be paid from principal. terry jones, cpa, is the trustee. james albemarle transferred cash of $500,000, stocks worth $400,000, and rental property valued at $250,000 to the trustee of this fund. immediately invested cash of $360,000 in bonds issued by the u.s. government. commissions of $7,900 are paid on this transaction. incurred permanent repairs of $9,000 so that the property can be rented. payment is made immediately. received dividends of $8,000. of this amount, $3,000 had been declared prior to the creation of the trust fund. paid insurance expense of $4,000 on the rental property. received rental income of $10,000. paid $8,000 from the trust for trustee services rendered. conveyed cash of $7,000 to edward albemarle.

Answers: 2

Answer

Business, 22.06.2019 11:00

Abank provides its customers mobile applications that significantly simplify traditional banking activities. for example, a customer can use a smartphone to take a picture of a check and electronically deposit into an account. this unique service demonstrates the bank’s desire to practice which one of porter’s strategies?

Answers: 3

Answer

Business, 22.06.2019 11:00

What is the correct percentage of texas teachers charged with ethics violations each year?

Answers: 2

Answer

You know the right answer?

Consider two firms that compete in Cournot oligopoly. They face inverse demand p(Q) = 120−Q where Q...

Questions