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# Koak and Pepsee are the only producers of soft drinks: TCk = 100 + 5q & TCp=100+10q

Question # 00183193
Subject: Economics
Due on: 01/31/2016
Posted On: 01/31/2016 03:04 AM

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Koak and Pepsee are the only producers of soft drinks: TCk = 100 + 5q & TCp=100+10q The market demand for soft drinks is: Q = 1000 – 10P.
a) If the firms behave as Cournot competitors, find the Nash equilibrium price, output per firm, and profit per firm.
b) If the firms behave as Stackelberg competitors, with Koak the leader, find the Nash equilibrium price, output per firm, and profit per firm.
c) If the firms collude to maximize their combined profit, find the price, output per firm, and profit per firm assuming they split the profits evenly.

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#### Koak and Pepsee are the only producers of soft drinks: TCk = 100 + 5q & TCp=100+10q

Tutorial # 00177997
Posted On: 01/31/2016 03:06 AM
Posted By:
shri21
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Tutorial Preview …333 xx * xxx 33) – xxxx + 5 x 333 xxx x 11011 xx Profit for xxxx = \$11011 xxxxxx for xxxxxx x TRp xxx TCp = xxxxxx – 0 xxx qp xxx x 1qp^2) xxx (100 + xxxxx = (100 x 283 xx xxx 0 xx 333 33 x 283 33 xxx 0 xx xxx 33^2) xxx (100 + xx * 283 xxx = xxxx xx Profit xxx Pepsee = xxxxx (b) Since xxx two xxxxx xxx Stackelberg xxxxxxxxxxxx we have x = 100 xxx 0 xxx xxx 0 xxx = 100 xxx 0 1qk xxx 0 xxxxx xxx 0 xxxx = 55 xxx 0 05qk xxx = x x qk x (55 – x 05qk) * xx = xxxx xxx 0 xxxxxx MRk = xxxxxxxxxxxx = 55 xxx 0 xxx xx equilibrium,…
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Koak_and_Pepsee_are_the_only_producers_of_soft_drinks.docx (16.74 KB)
Preview: drinks: xxx = xxx + 5q xxxxx TCp=100+10q  The xxxxxx demand xxx xxxx drinks xxx Q = xxxx – 10P xxxx If xxx xxxxx behave xx Cournot competitors, xxxx the Nash xxxxxxxxxxx price, xxxxxx xxxxxxxxxx and xxxxxx per firm xxxx If the xxxxx behave xx xxxxxxxxxxx competitors, xxxx Koak the xxxxxxx find the xxxxxxxxxxxxxxxxx price, xxxxxx xxx firm, xxx profit per xxxx  c) If xxx firms xxxxxxx xx maximize xxxxx combined profit, xxxx the price, xxxxxx per xxxxx xxx profit xxx firm assuming xxxx split the xxxxxxx evenly xxx xxx “k” xxx Koak and xxxxxxx for PepseeQ x qk x xx = xxxx – 10P x = (1/10)(1000 xxx qk xxx xxx = xxx – 0 xxx – 0 xxxxxx we xxxx xxxxxxxx reaction xxxxxxxx =.....
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